Indigenous groups say it is no surprise the Federal Government has moved to abolish the Aboriginal and Torres Strait Islander Commission (ATSIC).

Prime Minister John Howard says federal Cabinet agreed to axe ATSIC after a submission from Aboriginal Affairs Minister Amanda Vanstone today.

Acting ATSIC chairman Lionel Quartermaine says the commission has not been a failure and has expressed his disappointment at the decision.

"When are the politicans of this country, Labor as well as the Coalition, going to come under a bipartisan agreement to work with and to improve Aboriginal people's wellbeing?" he said.

"I thought they were leaders."

Suspended ATSIC chairman Geoff Clark has expressed his disgust at the organisation's demise.

Mr Clark says the decision will further disadvantage Aborigines.

"There'll be just lack of service, there'll be absolute chaos, the amount of Aboriginal people that will fall on the unemployment list," he said.

"The fact is most of those resources go to rural Australia and is administered and spent in rural townships, and where Aboriginal populations are centred you'll see a decline in the resources."

Mr Clark, who is currently fighting his suspension through the Federal Court, says the decision sends the wrong message.

"Why are we tearing down the very democratic processes, particularly when the Prime Minister says we're all equal and we should be mainstream and we're all one?" he said.

"Why are we not entitled to a democratic process to hear our visions and to hear our complaints and our solutions as to what it is that's important to Aboriginal people?"

Queensland ATSIC commissioner Ray Robinson says the decision is a massive setback for the Indigenous cause.

Mr Robinson says while the decision came as no surprise it is disappointing.

"It just takes away our self-determination, our self-empowerment," he said.

"It takes away the democratic right of Aboriginal people to elect their own representatives.

"It's just put our fight back another 50 years."

Mr Robinson says Indigenous people had been expecting it for some time.

"The Government only wants people to say what they want them to say and anyone that takes an appointment is a Government lackey as far as I'm concerned, and as I said before the Indigenous people of this country had already expected this so it's no great news to us," he said.

The first Indigenous woman to be elected to the New South Wales Parliament, Linda Burney, says the decision takes Aboriginal affairs back 30 years.

"It's one thing to say whether a body is working or not, but to completely disband a representative group of people and then put every program into the Government departments without any self-determination ... at all takes us back an enormous amount of years," she said.