The federal government has ruled out selling one of Sydney's last undeveloped headlands, saying the prime coastal land will "stay in public hands forever".
The comments come after Fairfax Media published details on Thursday of a consultant's report, commissioned by the Federal Department of Finance, which suggested the land should be sold.
"I can categorically rule out on behalf of the government (that) any proposal or plan to sell, invest or develop Malabar Headland or any part of Malabar Headland - it won't be sold," Federal Environment Minister Greg Hunt said.
Both the federal opposition and the local council demanded the government come clean over its plans for the redevelopment of the site.
The report said the commonwealth-owned land, which is just 12km from Sydney's CBD, is "surplus to requirements" and would generate a "significant return" if sold, generating up to $1 billion.
The region's federal MP, Matt Thistlethwaite, said the government had promised the local community the land would not be developed.
The report said as much as 48 hectares, or a third of the 160-hectare headland that separates Malabar and Maroubra beaches, has been earmarked within the document as suitable for possible mixed-use development after remediation, according to Fairfax.
Greens NSW Senator Lee Rhiannon said on Thursday selling the land would be environmental vandalism.
But Mr Hunt told Macquarie Radio on Thursday the land would not be sold.
"It will be kept in public hands, in perpetuity, not being sold, not on our watch," he said.
He said neither he or the prime minister has seen the report, which was allegedly leaked to Fairfax Media.
The government was working with the disabled riders who, "believe it or not, were evicted under Labor's watch", he said, so they could return to that land.
"It's staying in public hands forever," Mr Hunt said.
Randwick Council Acting Mayor Anthony Andrews said the whole site should be made into parklands for the enjoyment of the broader community, not developed for the commercial gain of the government and the few who can afford to live there.
Ms Rhiannon said if the federal government is serious about protecting the land it would protect it legally.
"If the minister is going to be true to his commitment that this area of prime coastal land will 'stay in public hands forever' he should move quickly to protect the whole headland as a national park with the required zoning," Ms Rhiannon said in a statement on Thursday.
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