The $360-million proposal, which faced criticism in the past because of the size of its adjoining housing development, had hit another snag this time from the Road and Maritime Services (RMS).

The RMS insisted on road improvements at the intersection of the Princes Highway and Forest Road and said  a grade separation in that area was needed for safety reasons.

But Craig Milburn, group director of Corporate and Community Services at Shoalhaven City Council,  disagreed.

Mr Milburn told the Inquiry into Tourism in Local Communities earlier this month that a ‘‘seagull-type intersection’’ would be sufficient and much less costly than an expensive grade separation.

‘‘Basically this is the show stopper to the project,’’ Mr Milburn said.

 ‘‘It’s not even a big deal. We are getting to a point where if it is not sorted out by the end of November, the whole deal could go somewhere else in the world. 

‘‘I think the Chinese are somewhat mystified by how something so small could hold up really what is a game-changer for the Shoalhaven region.’’

Mr Milburn said  the Jervis Bay Road intersection, further south of the development, had a  seagull intersection with more projected traffic through that area than the Shaolin temple development.

But a RMS spokesperson said  the Shaolin temple development would create a  big  increase in traffic and that a seagull intersection  would be likely to cause delays for motorists trying to turn right on to the highway and, as such, increase the risk of accidents.

‘‘A grade separated option would allow vehicles to more safely join the highway, reducing the need to take risks to merge with traffic travelling at 100km/h,’’ the spokesperson said.

 ‘‘The Road and Maritime Services will continue to work with all stakeholders to explore all options to facilitate the development.’’

The inquiry heard that the Shaolin religion had a huge number of followers around the world, including actor Richard Gere.

It is expected the project would inject $300 million into the NSW economy, with 300,000 domestic visitors and 150,000 international visitors, many of them Asian tourists, to flock to the Comberton Grange site each year.

It was  hoped the temple would generate $171 million a year  for  Shoalhaven.

The project is being considered  by the Department of Planning.

It includes accommodation for between 30 and 50 monks in a walled precinct, a kung fu academy with educational facilities and student housing, a golf course and a village centre offering commercial, retail and dining facilities. 

The project also has 300 housing lots.