The decision to move more than two dozen families from uninsulated, cramped construction trailers in Attawapiskat is a step forward for the community that declared a state of emergency last month, said the Ontario head of the Red Cross.

The federal government announced recently it was sending 22 modular homes to the aboriginal community near James Bay. But those homes can't be delivered until the winter road to the community is safely established.

John Saunders, Ontario director of the Canadian Red Cross, said the residents of the construction trailers will now move temporarily into the community's healing centre.

"The healing lodge has been proposed and accepted by the chief to be used as a temporary shelter," Saunders told CTV's Canada AM just before flying out to Attawapiskat. "It's a far better insulated and much safer, warmer environment for these 25 families."

Saunders said he hoped to meet with Chief Theresa Spence and the community's engineer to discuss the move.

Community leaders declared a state of emergency in late October, with many residents living in cramped, uninsulated tents and shacks, many of them contaminated with mold.

Saunders said the Red Cross began to direct assistance to the community as soon as it declared a state of emergency, sending 300 winter sleeping bags and space heaters to Attawapiskat.

He said Canadians donated over $300,000 to support the efforts.

"We've also worked with 90 residents living in construction trailers in the community and we're working to see what other methods we can use to keep those individuals warm until the trailers arrive," Saunders said.

It isn't clear when the winter road will be ready to handle the delivery of the modular homes.

Controversy has arisen in recent days over the federal government's handling of the crisis.

Aboriginal Affairs Minister John Duncan admitted Sunday on CTV's Question Period that the $1,300-a-day fee for the government-appointed consultant brought in to take over the community's finances would be paid out of government funds earmarked for the troubled reserve.

He also said Chief Spence had agreed to the ministry's offer Sunday of 22 new modular homes, seven more than previously offered, and had given the green light for renovations of the community's healing centre so that it can be used to house people who have been living in tents and shacks.

"This is a specific crisis," Duncan added. "From the beginning we've been working with the community."

However, Spence told CTV she never agreed to allow the federal government to put the reserve under third-part management, saying "we declared an emergency crisis, not a crisis on finances."

Duncan said that wasn't true and "the reality is the third-party manager is in place."