THE Federal Government has agreed to a demand by Territory Senator Nigel Scullion that will smooth the way for a nuclear waste dump near Tennant Creek.

Federal Energy Minister Martin Ferguson told radio the government would agree to Senator Scullion's demand for $10 million to allow the dump on Aboriginal land at Muckaty Station, about 120km north of Tennant Creek.

He said the money would fund education, health and infrastructure, ensuring Coalition support for the passage of the National Radioactive Waste Management Bill 2010 through the Senate, which is listed for debate today.

The dump will take medical waste and reprocessed fuel rods from the Lucas Heights reactor in NSW.

The plan for the dump is the subject of a legal challenge against the Federal Government in the Federal Court in Victoria.