* Canadian government pledges help over two years
* Natives threaten to expand blockades if demands not met
* Canadian opposition leader says aboriginal movement is strong
By Russ Blinch
TORONTO, Jan 13 (Reuters) - Canada will spend C$330.8 million over the next two years to improve water systems on aboriginal lands, as the Conservative government tries to deal with growing unrest on native reservations.
The government said it will improve water systems in more than 50 First Nation communities on reserves where residents often complain of deplorable infrastructure and housing.
"Our Government is committed to addressing water and wastewater issues on reserves to ensure that First Nations communities have access to safe drinking water," Aboriginal Affairs Minister John Duncan said in a statement.
The announcement followed a meeting between Canadian native leaders and the federal government on Friday, where Canadian Prime Minister Stephen Harper agreed to pay more attention to the demands of First Nations groups.
Under the banner of "Idle No More," native groups have been blocking roads and railways as well as staging hunger strikes to protest conditions on the reserves.
Some native chiefs have warned that the aboriginal protest movement was prepared to damage the economy unless Ottawa addressed the poor living conditions and high jobless rates facing many of Canada's 1.2 million natives.
Native groups complain that Canada has ignored treaties signed with British settlers and explorers that they say granted native peoples significant rights over their territory.
Ottawa spends about C$11 billion ($11.1 billion) a year on its aboriginal population, but living conditions for many are poor and some reserves have high rates of poverty, addiction, joblessness and suicide.
Gordon Peters, grand chief of the association of Iroquois and Allied Nations in Ontario, threatened last week to "block all the corridors of this province" this Wednesday unless natives' demands were met. Ontario is Canada's most populous province as well as its financial and industrial hub.
Native leaders also are demanding Ottawa rescind parts of recent budget legislation that they say reduce environmental protection for lakes and rivers. The most recent budget act also makes it easier to lease lands on the reserves where many natives live, a change some natives had requested to spur development but which others regard with suspicion.
Tom Mulcair, leader of the opposition New Democratic Party, said the government needed to take notice of the demands by native groups.
"There is a strong grassroots movement, and we ignore that at our own risk and peril, Mulcair told CTV News on Sunday.