"Half of Australia's butterfly species are found here, so it's a jewel in the crown of our Australian protected area estate," Australian Conservation Foundation (ACF) spokesman Don Henry told local radio ahead of the handover in Coen township.

Cape York, an area larger than Greece with a human population of just 18,000, is one of Australia's largest wilderness areas with sprawling cattle stations and savannas containing carbon sinks vital to the global climate.

It also has more orchid species than any other area in Australia and is home to endangered birds such as the cassowary, a large flightless species.

The region has, since the 1970s, been a battleground between successive governments determined to protect farm owners, environmentalists wanting to protect its biodiversity and Aborigines determined to reclaim traditional lands.

The Balkanu Cape York Development Corporation, which promotes economic development for Cape York Aborigines, said it was worried environmental concerns could stifle economic opportunities the park could bring to disadvantaged locals.

"Indigenous people in Cape York are deeply concerned that our desire to build a sustainable future on traditional lands will lose out to extreme conservationist demands," corporation executive Gerhardt Pearson wrote in the Australian newspaper.

Aborigines have inhabited Australia for 45,000 years and have the world's longest-living culture. But they have consistently higher rates of unemployment, substance abuse and domestic violence than other Australians.

Prime Minister Kevin Rudd in February apologised in parliament to Aborigines for past injustices in the 200 years since colonisation by Britain.

The McIlwraith Range land, formerly a pastoral farming lease, was to be loaned back to the government as a national park, jointly managed by the local Kaanju, Umpila, Lamalama and Ayapathu people and government-employed rangers.

Aborigines have been anxious in other land agreements reached with government or the courts to be able to use traditional lands to their own benefit, sometimes leasing land to miners for a share of profits, or creating parks to lure tourism dollars.

Wilderness Society spokesman Anthony Esposito and the ACF's Henry said opportunities from ecotourism would spring up for Aborigines from the area's "great landscapes".

"We're hoping at the end of the day that this is not only a great gift to all Australians, but it also provides a better future to the traditional owners," Henry said. (Editing by David Fogarty)