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One of Canada's poorest reserves is back in crisis after a dramatic summer intervention by the head of Indian Affairs has led nowhere, dashing the high hopes of Quebec's Barriere Lake Algonquins.

To make matters worse, the former chief, Jean-Maurice Matchewan, has stepped aside to face drug and weapons charges, and the parents of the community have shut down the local school. Indian Affairs Minister Chuck Strahl and the Assembly of First Nations are dispatching staff to discuss all that has gone wrong.

"We are really, really disappointed that the school has been shut down," Christian Rouleau, a director of the Quebec region for Indian Affairs, said yesterday. "We think it's inappropriate to use the school as a bargaining tool."

It was on June 30 that several Barriere Lake families, frustrated by the ongoing poverty, seized the opportunity of the National Day of Action to get the attention of federal politicians. They set up a campsite on the lawn of Parliament Hill, promising not to leave until their issues were resolved.

The demonstration could have taken on a much higher profile had it continued into the next day, when thousands of people descended on Parliament Hill for Canada Day.

Instead, the natives received quick and dramatic action from Ottawa and the protest ended quietly. Michael Wernick, deputy minister of Indian Affairs, came to the campsite and promised to appoint a special representative to address their problems. Jim Prentice, the department's minister at the time, later boasted that the dismantling of the protest site shows "there is a way forward."

Now, nearly five months later, the situation is dramatically worse.

Protesting against what they say are poor decisions made by an outside management team imposed on them by Ottawa, the Algonquins have shut down their own school. Indian Affairs responded by laying off school staff. The Algonquins also want Ottawa to replace the representative assigned to them.

Just three hours north of Ottawa, the cramped Quebec reserve is a striking example of natives losing out as others profit from their traditional lands.

Unlike Quebec's Cree and Inuit who receive millions each year through the 1975 James Bay treaty, the Algonquins never signed a treaty defining their rights.

The lucrative hydro power and forestry sectors surround them, yet the community of about 600 members is crowded onto a 59-acre reserve with no access to the power lines crossing through their backyard. A 1991 deal to share natural-resources revenues with the Algonquins has never been implemented.

The federal government has long been concerned with the financial management of the reserve and by internal political disputes, which in recent years have seen the simultaneous selection of two rival chiefs and councils and a third group that physically moved away and established itself in a provincial park under a new name.

Those currently approved to lead have no power, as the reserve remains under the management of a government- appointed third party.

Michel Thusky, who describes himself as a spokesman for the community, was among those who left Ottawa happy last June after their meeting with the deputy minister.

"That was a joke," he says now. "I was stretching myself to believe in him, but it's not moving at all."

Many families are highly critical of the way the local school is run. He said the students have no supplies because the outside managers have spent the education budget to hire 32 staff to serve the school's 66 students.

"[Indian Affairs is] claiming that we're hurting the kids, but with the budget we have, they don't have any pedagogical materials to purchase because it all goes to salaries," he said. "So it's just sort of a daycare without any supplies or equipment to work with."