Justin Trudeau’s government has launched a last-minute court appeal against a ruling that would require it pay billions of dollars to First Nations children who suffered discrimination in the welfare system.

Minutes before a court deadline on Friday afternoon, the government filed papers indicating it planned once again to fight a human rights tribunal decision ordering the compensation payment.

Soon after, however, the government released a statement saying it would pause litigation as it negotiated with First Nations groups to determine how compensation should be paid out.

The decision to fight the tribunal ruling – and the subsequent pause in litigation – was swiftly condemned by prominent Indigenous voices.

“Feds had years to sit and negotiate. Courts have told them to negotiate. Instead feds refused to abide by tribunal orders. Discrimination and harm continued to our kids. Now, before feds agree to negotiate, they wait till Friday 4.30pm and get their appeal in first. Wow,” tweeted Pam Palmater, Mi’kmaw lawyer and chair in Indigenous governance at Ryerson University.

In 2019, the Canadian human rights tribunal argued the federal government had “willfully and recklessly” discriminated against First Nations children living on reserve by underfunding child and family services. Children were taken from their communities and put into government-run programs.

The tribunal had ordered Ottawa to pay C$40,000, the maximum the tribunal can award, to each child as well as their parents and grandparents, but the federal government appealed the ruling.

That appeal was dismissed by a federal court judge who found that the government had failed to demonstrate the tribunal’s decision was unreasonable.

The battle for compensation dates back 14 years, when Cindy Blackstock, executive director of the First Nations Child and Family Caring Society and the Assembly of First Nations, argued that by underfunding child welfare on reserve, Ottawa’s conduct amounted to racial discrimination.

Indigenous leaders have long criticized the prime minister’s decision to fight both of these rulings – but had recently expressed hope the Liberal government would end the multi-year battle.

In its submission, the government says it “acknowledges the finding of systemic discrimination and does not oppose the general principle that compensation to First Nations individuals who experienced pain and suffering” – but said it found the way compensation was determined was problematic.

In its statement on Friday, the government said it hoped to reach a settlement by December.