However the scale of the project is a far cry from an earlier proposal from Babcock & Brown and Mariner Financial Ltd who wanted to build a 202-unit eco-resort.

Instead, a proposal for between four and six cabins on land adjacent to the 50-site camping area at the southern end of the park is being discussed, according to chair of the Killalea State Park Trust, Ed Gilmore.

"We are looking to get four or six to start with, we'll just see how they go and if they prove a great success we'll look to build another couple each year," he said.

Mr Gilmore is hopeful plans will be lodged with Shellharbour City Council early in the new year, although the project will depend on how much money the trust can borrow.

After being caught in the community backlash against the proposed eco-resort, the trust is now stuck in between the NSW Government and Opposition over financing the park.

A few months ago, Lands Minister Tony Kelly said the Government could not continue to fully fund the Killalea State Park operations.

The Government said it would spend almost $250,000 on Killalea this financial year, a figure Mr Kelly said was unsustainable.

Just before Christmas, the NSW Opposition declared it would not support any commercial development within the park.

Liberal candidate for Kiama Gareth Ward said while it was a matter for the trust to come up with a revenue stream for the park, the Opposition would rule out any commercial development within the park.

Mr Gilmore said discussions had taken place regarding establishing a gate fee. However he said it was felt the park should remain free to enter until there was some further development within the park to justify a fee.