The cabinet agreed on February 10, 1986, that the Commonwealth would continue to be responsible for administering Jervis Bay through an integrated department to be established to ''administer retained territorial functions''.

The decision was taken in the context of drafting legislation to establish an ACT Council but, with self-government, the title of the existing advisory body - the Legislative Assembly - was retained.

The Cabinet Minute released by the National Archives says ministers noted details of the functional arrangements needed to be worked out within the time frame for the establishment of the ACT Council.

Amendments to the Jervis Bay Territory Acceptance Act 1915 would be required to implement the proposed system of ''local law'' for the territory.

''The cabinet agreed that the Department of Territories prepare a paper as soon as possible addressing the issue of a local consultative council,'' the minute prepared by the cabinet secretary says.

The Jervis Bay Territory was surrendered by NSW to the Commonwealth government so the national capital in Canberra would have ''access to the sea''.

Although separate to the Australian Capital Territory, the Jervis Bay Territory is counted as part of the ACT for the purpose of the ACT's representation in the Senate and it forms part of the Division of Fraser for House of Representatives purposes.

The submission from the Department of Territories noted the Jervis Bay Territory was a separate Commonwealth territory. ''It does not form part of the ACT either geographically or constitutionally,'' it said.

However the effect of the 1915 legislation was that ACT laws applied in the Jervis Bay Territory, as far as practicable, and there was no separate power to make laws for that territory.

''The population of the Jervis Bay Territory at June 1984 was 750 - Defence personnel between 300-600 people, Aboriginals 150-200, about 95 Commonwealth employees and dependants and about 15 others.''

The cabinet submission says the Commonwealth had three major interests in the Jervis Bay Territory: defence facilities and activities, environmental protection and protection of the Aboriginal community at Wreck Bay.

At the 2011 census, an estimated 378 people lived in the territory, with 69 employed by Defence.

Aboriginal and Torres Strait Islander people made up 59.5 per cent of the territory's population.