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The Regina Campus of the First Nations University of Canada.

Aboriginal and government leaders are pulling Saskatchewan's one-of-a-kind aboriginal university back from the brink one week after its closing appeared imminent.

The provincial Advanced Education Minister spent Family Day in Vancouver discussing ways of salvaging the beleaguered First Nations University of Canada with federal Indian and Northern Affairs Minister Chuck Strahl.

Almost two weeks ago, both ministers appeared to sound the school's death-knell, announcing an end to its $12-million in annual funding - more than half the institution's revenues - after encountering resistance to reform and allegations of fraudulent misspending.

The tone has since changed.

"There's a definite window of opportunity here," provincial minister Rob Norris said after speaking with Mr. Stahl on Monday. "We're looking at a new model for the school that puts a far greater emphasis on accountability."

Under the new structure, the University of Regina or a similar post-secondary institution would take over certain administration and management roles at the school, Canada's only aboriginal-run university. In addition, both the federal and provincial governments could be granted voting power on the school's board of directors, currently controlled by the Federation of Saskatchewan Indian Nations (FSIN).

The federal and provincial government would then reroute their grants through the University of Regina rather than writing First Nations University a cheque.

"We will not, in the foreseeable future, be funding the First Nations University of Canada," Mr. Norris said. "We're very clear on that. There needs to be a new model. If there is an arrangement that enhances accountability through a publicly funded post-secondary partner, then we'll certainly look at that."

Mr. Norris will meet with FSIN Chief Guy Lonechild to discuss options for the university Tuesday. He expects they will establish a working group to examine the school's woes and recommend a new governance model.

"We see good reason for optimism," Mr. Lonechild said. "It certainly sends a positive signal that Minister Norris flew out to speak with Strahl. I wouldn't think he'll come back empty-handed."

Since gaining university status in 2003, the school has suffered a string of management and spending scandals.

Most recently, the school's senior financial officer was fired days after excoriating senior administration for taking inappropriate leave payments and filing inflated expense reports.

The officer, Murray Westerlund, later filed a wrongful dismissal suit.

The allegations placed the school's senior staff under intense scrutiny and galled the government officials who had been demanding the institution reform itself for nearly five years.

When they terminated funding to the school, the FSIN scrambled to meet demands for reform, replacing the university's 25-member board of governors with a smaller group.

But that decision led to friction among former board members - some of whom vowed to stay on - and prompted Mr. Norris to beseech, "Who's in charge?"

With a new tone of conciliation emerging between the province and the school, Mr. Lonechild said that the two governments may have misjudged the university's revered status among Canada's First Nations.

"I felt that there was a lack of understanding in how important this institution is," he said. "I'm leery of vindictive-type responses from the federal government. It was almost like they wanted prove a point based on partisan politics and short-term decision-making."

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