The News Corp newspaper was accused of inflaming already heightened racial tensions by publishing a cartoon criticising Indigenous family values.

The Bill Leak cartoon, published on Thursday, depicts an Aboriginal child being held by the collar by a policeman in the outback. The child's father holds a beer can and does not know his son's name.

In a statement issued on Thursday night, Senator Scullion said he was "appalled" by the cartoon, the publication of which was "particularly tasteless" on National Aboriginal and Torres Strait Islander Children's Day.

"Although Australian cartoonists have a rich tradition of irreverent satire, there is absolutely no place for depicting racist stereotypes," he said. "I would urge The Australian to be more aware of the impact cartoons like the one published today can have on Indigenous communities."

The newspaper has defended its controversial cartoon, with editor-in-chief Paul Whittaker saying the newspaper was "proud" of its coverage of Indigenous affairs.

Whittaker - who came to the job as editor of the national broadsheet from Sydney's Daily Telegraph - said issues surrounding detention of children in the Northern Territory and the pending Royal Commission had put Aboriginal issues in the spotlight again.

"Too often, too many people skirt around the root causes and tough issues," he said. "But not everyone."

Leak is yet to respond to requests for comment about the cartoon, which has been criticised as "racist" by Aboriginal leaders and caused outrage on social media platforms including Twitter.

Mr Whittaker cited Aboriginal leaders Marcia Langton and Noel Pearson in defence of the cartoon he published. He said both had this week called for Aboriginal adults to take more responsibility for social problems.

"Bill Leak's confronting and insightful cartoons force people to examine the core issues in a way that sometimes reporting and analysis can fail to do."

But the Press Council has received complaints and may investigate whether the cartoon breaches their guideline forbidding publishers placing " gratuitous emphasis on the race, religion, nationality, colour, country of origin, gender, sexual orientation, marital status, disability, illness, or age of an individual or group."

Greens' leader Richard di Natale called the cartoon "disgraceful" and harked back to the worst days of the White Australia policy.

"I've written to the editors of The Australian newspaper asking them to apologise for those awful stereotypes ... fancy a cartoon implying that Aboriginal parents don't love their children."

Race Discrimination Commissioner Dr Tim Soutphommasane told Fairfax Media: "Our society shouldn't endorse racial stereotyping of Aboriginal Australians or any other racial or ethnic group."

He said "a significant number" of people would agree the cartoon was a racial stereotype of Aboriginal Australians and he urged anyone who was offended by it to lodge a complaint under the Racial Discrimination Act.

The cartoon was "deliberately chosen to insult Aboriginal people", according to Professor Muriel Bamblett, AM, the chief executive of the Victorian Aboriginal Child Care Agency Co-Operative.

"It is disheartening in the extreme to have such a cartoon published on National Aboriginal and Torres Strait Islander Children's Day when we are celebrating the achievements of our children," she said.

"It demeans Aboriginal men and portrays all Aboriginal people in a poor light based on nothing more than prejudice and stereotype."

She said in 1990 the Royal Commission into Aboriginal Deaths in Custody said that Indigenous people were poorly portrayed in the media.

"Twenty-five years on and some sections of the Australian media are regressing ... The Australian's decision to publish a racist cartoonist's racist work is a provocative and hateful act that adds nothing to community knowledge and discussion and deserves to be condemned for the damage it does to Aboriginal/non-Aboriginal relations."

Aboriginal welfare is in the spotlight after the ABC's explosive Four Corners report recently on abuse of children in detention in the Northern Territory.

A royal commission will probe the allegations. Some commentators have seen the cartoon as a direct comment on the detention issue.

Previous Bill Leak cartoons about Aboriginal people have also seen him accused of racism. He has depicted Aboriginal men as rapists. Last year he depicted scrawny Indians trying to eat solar panels during the Paris climate conference.

The Australian promoted the cartoon on its Facebook page late Thursday morning despite the growing backlash.

Brisbane bookstore Avid Reader's social media manager, Chris Currie, said he had moved Bill Leak's books from the humour category to "fantasy" today as a "symbolic protest".