But the ACT government has again knocked back the Commonwealth, declaring it won't take on obligations for a "remote island almost 1900 kilometres away".

The Canberra-based Labor MP whose electorate covers Norfolk Island said the ACT should reconsider the offer, as his constituents remain in limbo about who will run their health and education services beyond 2021.

The development comes as the Commonwealth last week moved to temporarily suspend the council which helps run the island following a damning audit of its governance and finances.

The Canberra Times can reveal federal government officials made a new request to the Barr government to deliver services on Norfolk Island during the ACT election caretaker period.

It marks the second time in the less than two years the federal government has made an approach, after former Prime Minister Malcolm Turnbull used a WhatsApp message to Mr Barr to initiate talks about the ACT taking on the running of schools and health services on the island.

Mr Barr said at the time it was "highly unlikely" the ACT would step in, admitting he could see no benefit for the territory in taking on the responsibility.

Since it revoked Norfolk Island of self-government arrangements in 2015, the federal government has been paying NSW to deliver health and education services.

Norfolk Island Regional Council provides local government and some state government services, including vehicle registration, courts and ports management.

With the agreement with NSW due to expire in 2021, the federal government has been forced to explore other options.

NSW earlier this year agreed to continue running schools until the end of next year, giving the Commonwealth extra time. The agreement to run the island's health services is due to end in June 2021.

The latest approach to the ACT was made to territory officials, as caretaker rules prevented Mr Barr from taking part in talks.

The ACT government and federal governments refused to reveal exactly what had been requested, with the Commonwealth saying it was "not appropriate to publicly canvass government-to-government discussions".

However, The Canberra Times understands the request amounted to little more than a preliminary approach, and did not propose specific arrangements for running schools and hospitals on the island.

The request has nevertheless been swiftly declined by the ACT.

"The ACT government has declined the request," a spokeswoman for Mr Barr confirmed.

"The people of Norfolk Island should be able to run their own local government. The ACT will not take on new service delivery obligations on a remote island nearly 1900 kilometres away."

Labor MP for Bean David Smith, whose southern Canberra electorate of Bean also covers Norfolk Island, said it was "worth [the ACT] having a rethink" about the offer - but only if it could secure fair compensation from the Commonwealth for the work.

"In our work around the appropriate value placed on services, we came to the conclusion that NSW wasn't getting compensated enough," Mr Smith said.

Mr Smith said Norfolk Islanders were crying out for certainty about the future of health and education services. Their preference was for the arrangement with NSW to continue, he said, but with that appearing unlikely the goal was to secure another provider with a "good reputation".

A spokesman for the Department of Infrastructure, Transport, Regional Development and Communications said the Commonwealth was committed to the "continuity of essential state services on Norfolk Island".

The ACT government's decision comes at a time of heightened uncertainty about the future of Norfolk Island after the minister in charge of territories, Nola Marino, last week moved to suspend the council for three months.

The intervention follows the release of an independent audit of the four-year-old regional council's governance and finances. The audit found the council was facing challenges before the shock of the COVID-19 pandemic, which had stretched the entire island's tourism-reliant economy to the limit.

The council's short-term financial performance and long-term viability were identified as "critical risks".

Ms Marino will consider submissions from the council before deciding whether to temporarily sack the elected councillors and install an administrator to act in their position.

Mr Smith has written to Ms Marino to seek assurances that no council staff member would lose their jobs under any suspension.

He said the mayor and councillors should not be held responsible for the council's dire predicament, arguing that many of the significant problems identified in the audit related to problems which should have been dealt when the Commonwealth launched its intervention in 2015.

Mr Smith said that if the council was suspended, the federal government had to restore a "democratic voice" for Norfolk Islanders in another form.