The federal government is set to fight the Northern Territory over claims it illegally disturbed an Aboriginal sacred site in Kakadu National Park.
Parks Australia is accused of building a walking track at Gunlom - a cascading waterfall that appeared in the movie Crocodile Dundee - without permission from the Indigenous custodians.
NT Aboriginal Areas Protection Authority filed a criminal charge in September against Parks under the NT's Sacred Sites Act for carrying out uncertified work.
Defence lawyer David Robinson SC on Friday told the NT Local Court that Parks Australia - which is part of the federal government's environment department - intends to plead not guilty to the charge.
The commonwealth attorney-general is listed as an interested party in the case, which is set to become a constitutional battle.
National Parks director Jody Swirepik says she's committed to rebuilding the relationship with traditional owners and Parks was ordered to plead not guilty.
"The matters before the court are now outside of my control while the applicability of the relevant offence to Commonwealth bodies is being determined by the court," she said in a statement.
"Today's plea was necessary and in fact the result of directions from the Attorney-General to allow the constitutional law issues to be addressed."
Parks previously urged the AAPA to drop the criminal charge, saying it's immune from prosecution "due to the generally understood principles of crown immunity".
It alleges that the track was constructed close to a restricted ceremonial feature against the wishes of the World Heritage-listed park's traditional owners and without an authority certificate, which is issued after consultation.
"I acknowledge that the Gunlom walking track works caused significant distress to the traditional owners of the Gunlom region and other members of the community and express regret for the distress caused," Ms Swirepik said.
She said the offending section of the Gunlom walking track would be moved and Parks was meeting traditional owners in August to progress the matter.
An authority certificate had been sought and obtained.
Before AAPA issues an authority certificate it consults traditional owners about the sites to understand how they should be protected, and what restrictions and conditions should be applied to the proposed works.
The maximum penalty under NT law for carrying work on a sacred site without a certificate is $314,000.
The matter will return to court on August 5.
Australian Associated Press