An offer of compensation for homeowners living near the site of the aboriginal occupation in Caledonia, Ont. is being called an insult by opposition parties and residents.

The Ontario government is offering a total of $430,000 to 135 homes in Caledonia. That works out to compensation offers of between $2,000 and $6,000 per home.

Municipal Affairs Minister John Gerretsen made the announcement on Monday. But it was not welcomed by residents who believe they deserve a lot more.

"(The offer) is like spitting into their face," Caledonia resident and business Christine O'Neill said.

"That's the best they can come up with? Just the amount of emotional (suffering), the value of their homes ... it's just everything that people have been through here."

The money is supposed to provide compensation "for the distress and the anxiety and the pain and suffering that these families have gone through," Gerretsen said.

Dissatisfied residents are getting support from the Ontario Progressive Conservative Party. Opposition Leader John Tory called the offer "pathetic."

"It nowhere comes close to recognizing the diminished property values these people have seen. It nowhere comes close to recognizing ... the suffering they've gone through, the disruption to their lives," Tory said.

Provincial NDP Leader Howard Hampton called the government's offer "woefully inadequate." He added that instead of leading to a solution, the offer is like rubbing salt in the wound.

Owners of 20 homes closest to the area under dispute will get $6,000 each. Another 80 nearby homes will get $3,000 and the remaining 35 households will get $2,000 in compensation.

Gerretsen called on the federal government to also offer compensation to Caledonia residents. Premier Dalton McGuinty added his voice Tuesday, saying Ontario has done its part.

McGuinty said he will be interested to hear what Ottawa plans to do to compensate residents and the provincial government for costs it has incurred.

The compensation money announced Monday is in addition to $1.4 million Queen's Park gave to local businesses to make up for lost revenues when the community's roadway was blocked. Haldimand County also received $210,000 for marketing and $100,000 to pay for counselling for residents.

Negotiations between representatives of the Six Nations Confederacy and the federal and provincial governments are set to resume Wednesday. Discussions aimed at ending the more than year-long dispute broke off earlier in March.

With files from The Canadian Press