Aboriginal and Torres Strait Islander Commission (ATSIC) chairman Geoff Clark has refused to confirm whether the stripped-back commission is considering selling some of its assets to fund a legal challenge.

Prime Minister John Howard announced the abolition of ATSIC last year but a Senate inquiry has deferred the process.

In the interim, ATSIC's funding powers have been handed to other government departments.

The Senate inquiry investigating the abolition of ATSIC is due to report on March 8.

Once the report is debated the bill will be passed through Parliament and ATSIC will cease to exist.

But Mr Clark is hoping a court challenge to last July's changes can delay its abolition.

"We've now challenged the fact that what they did in the very deceptive campaign of denigrating Aboriginal affairs across this country has... elements of clear illegality, which we think needs to be challenged," he said.

"But as we all know, it's a long and extremely difficult process to get anything through the courts, and quite expensive."

Mr Clark has refused to confirm or deny a newspaper report that claims ATSIC commissioners plan to sell assets, including property and art, to finance the legal fight.

Mr Clark says the assets are meant to be for the benefit of Indigenous Australians.

"We need to have the capacity to meet to discuss a whole range of issues," he said.

"That's our business, whether we decide to sell, buy or whatever... that's a decision for the board.

"The board is entitled to make that decision legally and we don't have the capacity and I think that's the point."

However, a spokesman for Indigenous Affairs Minister Amanda Vanstone says the assets are Commonwealth Property and as such cannot be sold.