Prof. James Anaya, the UN's special rapporteur on human rights and fundamental freedoms of Indigenous people, who has just completed a 10-day fact-finding mission of Aboriginal communities across the country, said the intervention is "incompatible" with Australia's obligations under the International Convention on the Elimination of All Forms of Racial Discrimination and the International Covenant on Civil and Political rights.
The previous government of John Howard in 2007 took charge of 73 Aboriginal townships after a government-commissioned report said alcohol and drugs were fuelling sexual abuse of indigenous children.
Under the intervention policy in the Northern Territory, welfare payments to Aborigines are held by officials to ensure money is spent on food instead of alcohol.
When the Labor Government was elected in 2007, Prime Minister Kevin Rudd promised to take steps to close the gap between Indigenous and non-Indigenous Australians in areas such as health and education. But he has also persisted with the "intervention."
Prof. Anaya said, "It would seem to me that the objectives of the Closing the Gap campaign, the emergency response and other current initiatives and proposals of the Government would be best achieved in partnership with Indigenous people's own institutions and decision-making bodies," he said.
He also urged the Government to reinstate the Racial Discrimination Act, referring to the legislation suspended by Howard when he introduced the policy.
"I hope that amendments to the emergency response will diminish or remove its discriminatory aspects," he said.
The Federal Government has already indicated it will introduce legislation to reinstate the Act later this year.
Aborigines remain the poorest and most disadvantaged group in Australian society more than 200 years after Europeans settled in 1788.
Their life expectancy is 17 years less than other Australians and they are three times more likely to experience coronary problems, according to the Australian Medical Association.