Mr Shanahan was one of two legal figures appointed last week to review a decision by Queensland Director of Public Prosecutions Leanne Clare not to prosecute Senior Sergeant Chris Hurley over the 2004 death of Mulrunji Doomadgee. But The Australian revealed yesterday that Mr Shanahan, 76, was on the three-member panel that recommended, after a unanimous vote, that Ms Clare be given the position six years ago.

High-profile lawyer and president of the Australian Council of Civil Liberties Terry O'Gorman called on Mr Shanahan to stand down. "Despite my personal high regard for ex-judge Pat Shanahan, he should not sit because he is compromised," Mr O'Gorman said yesterday.

Mr Mundine said Mr Shanahan's apparent conflict of interest would compromise the review, regardless of its findings.

The Government had again failed to restore faith in the justice system and improve relations with Aborigines, he said. "This (review) was a great opportunity for them to be seen as clean-skinned and above board, but they have completely stuffed it up," he said.

"The Queensland Government does not get it and the Queensland justice system doesn't get it."

Opposition justice spokesman Mark McArdle said although Mr Shanahan was "an excellent jurist", he should not have been appointed to the review. Attorney-General Kerry Shine "has not gone and done his background homework ... and it shows a poor lack of judgment that he then did not take the step of saying, 'Right, I take that on board and I will commission someone else'.

"Because the Palm Island case has become so embroiled in controversy, any person who reviews Ms Clare's decision should be completely at arm's length.

"We have to ensure that the public perception of the process and the end result is absolutely squeaky-clean."

But Mr Shine said Mr Shanahan would help review the file and decision, not pass comment on Ms Clare or her role.

The position "would have been filled based on considerations of merit and experience, not on personal affection", he said.

A spokeswoman for Mr Shanahan decline to comment yesterday. Brisbane barrister Peter Davis, appointed alongside Mr Shanahan to review the case by early February, could not be contacted.

Mr O'Gorman and Palm Island spokesman Brad Foster repeated calls for the review to be undertaken by an interstate Director of Public Prosecutions, as had occurred in at least one other case.

But Mr Shine told the ABC that competent people with experience in criminal law were more important than whether they came from outside the state.