The Turnbull government is facing a popular revolt by Norfolk Island residents over the terms of a bailout program imposed by Canberra on the financially-stricken territory.

Around 300 residents – or 20 per cent of the Norfolk Island population – stormed the chambers of the territory’s dissolved parliament on Wednesday demanding the resignation of the territory’s administrator, former federal Liberal Party MP Gary Hardgrave.

“We started our occupation of the Legislative Assembly building on Wednesday night and we are going to stay here until they try to remove us,” sit-in protester Ernie Christian told The New Daily.

“We have decided to take back what is ours – the Australian government sacked our democratically-elected parliament last year and we are here to take it back.”

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Mr Christian, a descendant of Fletcher Christian who led the mutiny of Captain William Bligh’s Bounty in 1789, said the protesters identified as Norfolk Islanders, not Australians.

“We don’t dislike Australians, but we certainly don’t like what the Australian government is doing to us,” he said.

Mr Hardgrave took the administrative reins in July 2014 with a mandate from the Abbott government to make Norfolk Island’s tax laws consistent with the Australian mainland.

Hundreds of Norfolk Island residents are now agitating for Mr Hardgrave to be thrown off the island.

Hundreds of residents are staging a sit-in protest on Norfolk Island. Photo: Tim Vollmer

Protest leaders on Wednesday tried to hand him a letter that included a demand he remove himself from the territory immediately.

Mr Hardgrave refused to accept the letter, which is being supported by at least 450 residents.

Copies of the letter were also sent to Prime Minister Malcolm Turnbull and Governor-General Sir Peter Cosgrove.

About 50 protestors have established a tent city outside the parliament buildings in the capital, Kingston.

They are within earshot of Mr Hardgrave, who lives across the road in Government House.

The timing of the protest is symbolic for Norfolk Islanders, many of whom are descendants of mutineers on Captain Bligh’s ship, The Bounty, in April 1789.

Norfolk was granted limited self-government in 1979, under which the island elected a government that ran most of its affairs. Photo: Tim Vollmer

The Australian government last year dissolved the territory’s parliament and earmarked more than $100 million to fix its ailing economy.

The measures are resisted by Norfolk Islanders who want to retain their own parliament and tax system.

Mr Christian said the Islanders had grown disillusioned and angry with Mr Hardgrave’s conduct.

“We want him removed for his lack of empathy and for misleading the Australian government about the situation on Norfolk Island,” he said.

Gary Hardgrave, pictured in 2007, has been administrator of Norfolk Island since mid-2014. Photo: AAP

The long-running stand-off between Canberra and residents of the island took a new turn on Monday when human rights lawyer Geoffrey Robertson lodged an application with the United Nations to review the Australian government’s decision to dismiss the territory’s parliament.

The residents claim the federal government illegally removed their collective right to self-determination.

Mr Robertson said earlier this week that it may take the UN months or possibly years to hear the case.

The campaign to restore self-determination in the territory is being coordinated by a group known as Norfolk Island People for Democracy. The group has around 1000 supporters, accounting for more than half of the island’s population.

A spokesperson for the movement said Canberra had blocked the NIPD from producing a weekly talkback segment on the island’s community radio station because it was judged to be “against the government”.

The spokesperson said NIPD members feared retribution by the Australian government.

“It is extremely sad that standing up for one’s rights is met with such resistance in the modern day, and especially from a government that asserts that it upholds the principles of democracy and the rule of law.”

While Norfolk Islanders are winning international sympathy for their cause, several anti-money laundering agencies have raised concerns about the territory’s lax incorporation and tax laws that facilitate international tax avoidance and the illegal movement of money.