Since 1987, Warren Lafave says, he's been trying to settle with the Yukon government over the costs he incurred when members of the Ross River Dena Council blockaded the winter road to his Inconnu Lodge.

Now, facing foreclosure on the resort, and with his Business Development Loans from the Yukon government being brought to court, Lafave said he's prepared for a court battle.

'The government told me to make offers,' he said in an interview this morning from Kelowna, B.C.

He said the latest offer he tried to negotiate would have seen him pay off one loan of $142,500 and have the other $100,000 paid with a reduced interest rate from more than 13 per cent to 6.8 per cent.

Both loans accumulated more than $354,619.38 in interest for a total of $597,119.38 as of last Dec. 31.

In 1987, as the Ross River Dena Council was negotiating its land claim, it set up a blockade to Lafave's winter road, which prevented him from transporting goods into the site. The Yukon government, he said, instructed the RCMP not to remove the blockade.

Over the years, there were indications from the government that he would get an equitable settlement in the matter, but that never happened, he said.

Lafave stressed he holds nothing against the first nation, whose members were just trying to deal with their land claims at the time.

'I've dealt with every level of government for 19 years,' he said, adding he should have taken both the federal and territorial governments to court over it years ago.

The federal government was part of the land claim negotiations as well.

A settlement amount in the case was never established, but Lafave said he was willing to be flexible in negotiations with the territorial government.

At one point, the Department of Economic Development came to him to deal with the matter, but an election was called and the settlement never went ahead.

Then, a couple of years ago, when the territorial government was dealing with its outstanding debtors, he tried to make an offer but was turned down.

Dana naye Ventures took over the outstanding government loans last year.

In the latest offer he sent to Premier Dennis Fentie's office last week, Lafave was told the loan is now with Dana naye and he must deal with officials there.

'That's playing political games,' Lafave said of the government's response, adding that the government also should have lowered its interest rates on the loans 10 years ago.

Dana naye has responded to the offer stating it would settle for $550,000, said Lafave. At that amount, Lafave said the matter will go to court.

At this point, he said he's been forced to decide whether he wants to file a defence in court and force a trial, and is leaning in that direction.

'It'll be a big, ugly case,' he said.

The lengthy court battle, which Lafave estimated could take years, could mean shutting down the lodge.

Lafave said he's tried to deal with the matters between him and the Yukon government quietly, but that's not working.

Focusing on the matter so far has meant he's putting less emphasis on marketing and travelling to various events to promote the resort. He suspects his 2006 season could be cut in half. Though he's taking reservations, he won't go out of his way to let potential customers know about the resort.

It's a business that's been bringing tourists to the Yukon for close to 20 years, putting about $2 million into the economy annually, he pointed out.

If the lodge ends up shutting down, it means businesses like Alkan Air, the High Country Inn (where his guests stay before heading to Inconnu) and The Grocery People will lose business too, he said.

Inconnu also employs about 20 workers in the summer.

Looking at the Yukon's economy, the territory needs places like Inconnu, he said.

Both he and his clientele have supported the mining community over the years, he added.