A southern Alberta First Nation is battling the federal government for the right to control its own oil and gas royalties.

The Bearspaw First Nation is demanding that Ottawa no longer collect any money on its behalf and return about $50 million collected from oilpatch activity on its traditional territory.

The band alleges the government is doing a poor job of investing the savings and won't release the funds because of Ottawa's mistrust of First Nations to properly handle money.

The federal government has had control of band money since the late 19th century and acted as trustee of any energy royalties earned by First Nations. To this day, the government also holds on to money earned from other sources, such as the sale of land, timber and gravel.

A few other First Nations in Western Canada have succeeded in withdrawing all of their funds from the federal government, but the process has always been challenging and in one case took 16 years of legal wrangling.

The Bearspaw not only wants to access all of its funds but ensure that future revenues go straight to the First Nation. The band council wants to set up its own trust fund, which it expects will earn much more interest.

"We're not asking for handouts. All we're asking is to manage money that belongs to us," Chief Darcy Dixon said in an interview.

"Today, they're still saying, 'Hey look, folks. You can't look after your money. You can't do better than we can.'"

If the First Nation wanted to withdraw a few million dollars for a housing project, it would be easy to do, Dixon said, but to take control of the entire fund is proving to be "impossible."