Ms Keneally has ruled that the State Government will determine Killalea Coastal Investments' modified application, for 106 accommodation lodges in two areas of the park.

The minister said because the development was in a state park, it was a unique proposal and on environmentally sensitive land, it deserved greater assessment, wider community consultation and the scrutiny that came with a 3A process.

However, Ms Hale said people were right to be cynical when a minister used their powers under Part 3A of the Environmental Planning and Assessment Act to call in a development.

"Especially one which has just 106 recreational cabins," Ms Hale said.

"It is difficult by any stretch to imagine how this is state significant."

Ms Hale said it was appropriate the development be determined by Shellharbour City Council.

Speaking to a rally of about 70 people at Killalea on Sunday, Ms Hale said it was critical to keep up opposition to the proposal.

"One-hundred and six units could could be just stage one."

Rally organiser Sony McKay said work would soon begin on turning 15,000 petition signatures into objections towards the amended plans when they are publicly released.

A Department of Planning spokesman said they were waiting for the proponent's preliminary assessment of the project.