The earmarking of a remote Australian outback area as a nuclear waste dump was invalid because officials failed to contact all traditional Aboriginal landowners affected, a court heard Monday.

Muckaty Station in the Northern Territory was nominated in early 2007 as a site to store low and intermediate radioactive waste under a deal negotiated with the Aboriginal Ngapa clan.

While Australia does not use nuclear power, it needs a site to store waste, including processed fuel rods from the country's only nuclear reactor at Lucas Heights, on the outskirts of Sydney, a facility which is mostly used for nuclear medicine and research.

At the time, the Northern Land Council, the indigenous organisation which helped negotiate the deal on behalf of Aboriginal landholders, said the millions the community would receive as a result would benefit generations.

But opponents have fought against the dump for years, with a trial starting in the Federal Court in Melbourne Monday alleging Muckaty's nomination was invalid due to a failure of the government and the land council to obtain the consent of all Aboriginal owners.

"What we're here to say is 'no more' and that this process was so legally flawed that it is invalid," Ron Merkel, who is representing traditional owners, told the court.

"The opposition is in no small part based on a spiritual affiliation to the land and that radioactive waste will poison the land," he said in comments cited by Australian Associated Press.

The court was told the consent of all groups with a claim to the land was required for the facility to go ahead, but some Aboriginals whose country was affected have never had a chance to voice their concerns until now.

The Northern Land Council denies the claims.

"I'm stating that the NLC stands by its processes in relation to all matters that relate to the court case and we believe that we've done everything properly, lawfully, and it was done comprehensively," council chief executive Joe Morrison told the ABC.

Speaking to reporters, Kylie Sambo, of the Warlmanpa people, said the idea of a waste facility on the land, which is in the centre of the country, was "poison".

"We don't want it to spoil our country because we love our land and we've been there for centuries," she said.

"My uncle once told me, 'You may think you own the land, but in fact the land owns us'."

The Australian Conservation Foundation said the case raised questions about the country's management of long-lived radioactive waste.

"Australia has never has an independent assessment of how best to manage radioactive waste; now we urgently need one," campaigner Dave Sweeney said.

The case is set to run for five weeks.