The Aboriginal National Art Gallery proposed by the Northern Territory Government in Alice Springs is in doubt after traditional indigenous owners have withdrawn support.
The family members wrote a letter saying they did not support the use of the Anzac Hill enclosure where the gallery was
The letter has embarrassed the NT government for which the gallery is a key project.
He had earmarked $ 50 million for the gallery, but more external investments are needed, hoping to build it by 2022.
Less than a month ago the Stevens family representing the traditional owners pleaded Alice Springs Council to support the construction of the gallery on site.
Currently houses the city's main rugby field and an unused school.
The elders said the gallery would be a place where the local people of Arrernte could "show our art" and future generations would learn about their culture.
Bu It seems that family members have met and changed their minds.
A spokesperson for the Minister of Culture Lauren Moss said the news was a surprise, given that the Aboriginal Protection Authority met with the owners to consult the protection of the sacred sites the "all clear".
The gallery can offer significant economic, social and cultural benefits and create hundreds of jobs for the locals, government head Michael Gunner said in a statement.
"The government respects traditional owners and is currently considering this change in their position," he said.
"Without the support of traditional owners for the project on this site, it will be necessary to consider the future of the project."
The City Council of Alice Springs does not support the use of the site for the gallery, but the Northern Territory government could take possession of the land
Not building the tunnel could save money for an NT government run out of money in the grip of a budget crisis in which it is indebted to pay wages.