Aboriginal elder spokeswoman Lowitja O'Donoghue believes Noel Pearson's ideas to improve indigenous lives are patronising and unworkable. She spoke to Penelope Debelle about her vision for her people.

On the second day of the Reconciliation Australia Conference in Canberra in May, Noel Pearson, the radical new voice of indigenous policy, walked into a meeting of the black caucus. According to Lowitja O'Donoghue, inaugural head of ATSIC and elder stateswoman of indigenous affairs, Pearson turned on them all.

You're not up to it, she remembers him saying. He chided them over the "stolen generation", saying if he wanted to, he could have brought along his mother to cry. He turned on his mentor, Melbourne academic Professor Marcia Langton, saying he was disappointed in her, and told the younger Aboriginal leaders they were all in too much of a hurry. People were stunned, O'Donoghue says, but only she was willing to speak out. "Noel, all I want to say to you is, 'Will you be a team player?' " she asked him. "He didn't answer. Nobody else said anything. He is just carried away with himself."

The clash of personalities - O'Donoghue says Pearson came from nowhere in the early 1990s and tried to model himself on then prime minister Paul Keating, right down to his taste in sharp suits - represents a crossroads in thinking.

Lines are being drawn in the red desert sands of Aboriginal policy. On one side is Pearson, a Federal Government adviser with the ear of Prime Minister John Howard and Treasurer Peter Costello, talking up harsh intervention and incentives to break the indigenous welfare dependence cycle.

On the other stands an increasingly grumpy O'Donoghue, who could not be more opposed in her views. After a lifetime of involvement in black politics, O'Donoghue, who turns 73 on Monday, says Pearson lacks her life experience and does not understand where his policies would lead. Pearson could not be contacted this week for a response.

In O'Donoghue's own country, the socially devastated Anangu Pitjantjatjara Yankunytjatjara lands in South Australia's Far North, the State and Federal governments last month announced the third swimming pool under the joint "no school, no pool" program. She angrily objects to what seems a commonsense attempt to lure children to school through the incentive of swimming in a pool, arguing it entrenches the helplessness and irresponsibility of the families and takes them further down the road to powerlessness.

"It's just patronising," O'Donoghue says. "Every community has got to accept its own dysfunction. It's got to understand it's a dysfunctional community, make a decision about accepting that and then decide what it's going to do about it."

She is equally opposed to other Pearson policies, like the removal of welfare payments from dysfunctional families who squander money on alcohol and gambling and don't send their children to school. "People are starving now," she says. "You don't put kids in another situation where their parents haven't got welfare payments."

She says this is her life experience speaking. In the early 1960s, a young Lois O'Donoghue took a job with Aboriginal Affairs as a nurse near Coober Pedy. Having fought racial discrimination to become South Australia's first qualified Aboriginal nurse, she worked for two years doing remote nursing in India, then travelled across the country by train. She returned to Australia committed to helping her people and deliberately took a job where she could look for her mother. The daughter of an Irish stockman and an Aboriginal woman, Lowitja was surrendered by her mother as a baby and grew up in a series of institutions. On her first day in Coober Pedy, she walked past some women sitting in a circle, passing the flagon around: "Lowitja, they said - first time I'd heard it - Lowitja, Lily's daughter."

It was a difficult reunion that did not take place for some time, because the young Lowitja was there to work. As part of her nursing duties she ran a breakfast program for children along the lines of those in favour today. Early in the morning she would do the rounds of the camps, picking up children and taking them to town to wash and feed them before school. Not for long, she says. "I said to them (the families), 'I'm not doing this any more, this is your job', but I'd work with them to do it. This stuff is not fair."

She sees interventions like this as absolving from responsibility the parents who have been drinking and gambling all night and not getting their children to school. She says the approach should be one of individual case management by education departments, as it would be if the family was white.

"Education departments have truancy policies and they are just not implementing them," she says. "I know kids who have not been to school for 12 months and the department has done nothing in relation to it, nor have school liaison officers. Why aren't they in fact dealing with these families and their children? They have a responsibility to do that."

O'Donoghue was Aboriginal and Torres Strait Islander Commission chairwoman for six years from its inception in 1991. She sees this in some ways as a golden time, when Aboriginal people from around Australia were learning how to prepare budgets and work together. But she did not support ATSIC in its recent form, believing instead that Aboriginal people need an organisation to give them a voice without the onus of self-governance. The problem at the heart of it all, she says, is money and the cultural problems Aborigines have in managing whole communities. Aboriginal people look after their own, she says. Giving financial control to people from this background who were not trained in administration was a disaster.

"Money - that was the root of the evil at ATSIC," she says. "It was always a hard job keeping people on the straight and narrow. Even on the board level it was just really hard work."

O'Donoghue was appointed last year, along with Baptist minister Tim Costello, to continue the interrupted work of the former unofficial administrator of the Anangu Pitjantjatjara Yankunytjatjara Lands, Bob Collins, who was seriously injured in a car accident. In her report, O'Donoghue recommended her lands - which suffered yet another suicide this week, one of a series of young deaths from either suicide or petrol sniffing - be placed in the care of World Vision, which Costello now heads. Part of the dysfunction was the bitter clan and family disputes that prevented services being passed down the line. O'Donoghue and Costello called for World Vision to be given the money and authority to build capacity on the lands, to go in as "the honest broker" and do what governments had never done.

After 24 years of self-governance, the lands are a sad mess because, O'Donoghue says, the Pitjantjatjara lands were handed over to people whose lives had been run for them by administrators or the church and who had no training or experience or ability to self-govern. The money was there, but there was no proper supervision of it. And it failed. "Then there are all these dirty old hippies that went up there, yes, they're still around and they initiated them all," O'Donoghue says angrily. "And the pedophiles."

O'Donoghue is furious with the Rann State Government, which she says has ignored her report. Meanwhile, the sorry business continues. Five girls from the area last year studied at the Wiltja Aboriginal study program at Adelaide's Woodville High School and completed year 12. All, she says, are back on the lands sniffing petrol.

She remains closely involved with her people. Last week she had talks with the teachers' union to try to understand what was going wrong with the education programs. In Adelaide she helps feed homeless people, many of whom are Aboriginal. They call her when fights break out, as they often do, between urban and remote-area Aborigines, who treat each other with hostility. "Well, I go down there and they listen to me, mostly," she says. "They cop it from me."

This is a critical time in Aboriginal politics and Aboriginal history. At the May Reconciliation Conference - leaving aside O'Donoghue's attack on the conference organisers for failing to tell her on the podium that Indigenous Affairs Minister Amanda Vanstone would be jumping the speakers' queue - Senator Vanstone talked about the break with the past. "We are at a point in history when Australia is embarking on a new conversation in indigenous affairs," Vanstone said. "It is a conversation based on an almost universal belief that the approach of the past 30 or more years has not delivered the results that we would have hoped for."

O'Donoghue wants the break with the past to happen in a way that will take her people forward. She wants a national forum to talk about what self-determination should mean, to distinguish between Aboriginal policy and Aboriginal governance. And she wants Noel Pearson to put his policies into practice on the Cape York Peninsula and leave the rest of black Australia to work out a future for itself.

"This stuff he is talking about is just not fair," she says. "If Noel wants to prove it's right, let him do it in Cape York and show us that it works. The policies he is espousing to the Prime Minister and Peter Costello are being applied across the board, and one size does not fit all."