TORONTO - Imposing a deadline to settle a long-standing aboriginal land-claim dispute in the southwestern Ontario town of Caledonia is not the way to go despite provincial calls to speed up the process, Indian Affairs Minister Chuck Strahl said Thursday.

"Frankly, negotiation -- rather than ultimatums -- I think is a better way to go," Strahl said after delivering a speech to a Toronto business audience.

The federal Conservatives were returning fire after Ontario Aboriginal Affairs Minister Michael Bryant suggested Ottawa has been dragging its heels over Caledonia rather than expediting a speedy resolution.

The Conservatives need to "move it" and set a deadline to end the dispute that sparked a two-year occupation of a housing project by Six Nations protesters and divided the local community, Bryant said.

However, he refused to suggest a date, saying that's up to the federal government to decide.

"We are not where we should be," Bryant said. "It's been 200 years. ... The Harper government needs to stop hesitating and get on with a solution."

Ottawa could impose a hard deadline by which negotiations must end, but that would turn the dispute into a "policing issue," Strahl countered.

"If he would like that - by itself without negotiations -- he can have it, because I don't think it would be very pretty situation," he said.

It's not the first time the Ontario Liberals have clashed with the federal government over the Caledonia dispute, which erupted when protesters blockaded roads and a rail line.

Bryant and Premier Dalton McGuinty have repeatedly called on Ottawa to help pay for the rising costs of the occupation, where simmering tensions between residents and protesters have spilled over into violent confrontations.

Although the federal government gave Ontario $26 million a year ago to help pay for the Caledonia occupation, the province has since paid out more than $50 million -- the bulk of it for round-the-clock policing.

Ontario Regional Chief Angus Toulouse wouldn't weigh in on the debate, but noted that aboriginal groups have been waiting too long already for land claims to be settled.

"The First Nation should have been able to deal with this a long time ago," he said. "The only comment that I make is that the government -- whichever government it is -- needs to step up to the plate."

The provincial Conservatives have accused the Liberals of encouraging lawlessness by tolerating recent escalations of aboriginal protests, a sentiment echoed by federal Multiculturalism Minister Jason Kenney during a recent visit to nearby Brantford.

Kenney called on the province to uphold the law in the face of "extortion" tactics by aboriginal protesters, which Bryant suggested may have worsened tensions.

"For one of their ministers to show up in the midst of that ... and the minister of multiculturalism to say, 'Oh well, that's a provincial problem, they should just charge everybody with extortion and lock them up,' was galling and galled a lot of people," Bryant said.

Much of the frustration stemming from the Caledonia dispute relates to provincial matters, not federal ones, Strahl said.

"The only thing that the federal government can do is table an offer and negotiate it to a settlement," he said.

"Much of the other things that people are frustrated with -- whether it be zoning requirements, local bylaws, police enforcement issues - are all provincial. They have nothing to do with us and there's nothing we can about that other than encourage people, of course, to obey the law and encourage the province to enforce the law if it's being broken."

A deadline is a "good idea" that will put pressure on both sides, said Haldimand County Mayor Marie Trainer.

"Whatever works," she said. "If they can't come to something agreeable at the table, then maybe an arbitrator is the way to go."

Bryant also unveiled a $25-million fund Thursday to help aboriginal communities represent their interests when dealing with governments and businesses, which he said would help "level the playing field."

The money could be used to hire aboriginal scientists, lawyers and other experts needed to assess the impact of economic development projects in First Nations communities, he said.

The fund was among the recommendations of a judicial inquiry into a fatal police standoff with aboriginal protesters at Ipperwash Provincial Park.