NSW Lands Minister Tony Kelly said the appointment of Kiama Deputy Mayor Ben van der Wijngaart to the trust's board would be "inappropriate" given his history of campaigning against a planned multimillion-dollar resort in the park.

"This decision is based on the reasoned view that it would be inappropriate to appoint any representatives who have either individually or as part of an organisation, actively demonstrated their opposition to the activities of the trust, as occurred during my visit to the park last year," Mr Kelly said in a letter to the council.

Councillor van der Wijngaart said the decision was undemocratic. He claimed the minister only wanted to appoint "yes men and women" to the board.

Killalea Coastal Investments was given a 52-year lease in April 2007 to build 202 units, a conference centre, tennis courts, pools and restaurants in the park.

Cr van der Wijngaart, as a member of the Save Killalea Alliance, crossed swords with Mr Kelly during his visit to announce the lease and as part of a follow-up deputation to Parliament House. To avoid a conflict of interest, Cr van der Wijngaart gave up his alliance membership after his nomination to the trust board.

"Both Kiama and Shellharbour City councils have in the past indicated their objection to the proposed development ... it's important that those dissenting views continue to be represented," he said.

Mr Kelly, in the same letter to the council, also said while Shellharbour City Council would be represented, Kiama council would not, as the park was outside its jurisdiction.

Kiama Mayor Sandra McCarthy quit as council's trust delegate last April.