Wollongong City Council should object to recommendations which could pave the way for large residential developments on environmental land at Helensburgh, according to a staff report.
In a suggested response to findings from the Joint Regional Planning Panel (JRPP), council staff urged councillors to object to two of the authority's recommendations and raised concerns about escalating planning costs and environmental risks.
The panel was asked to intervene in the long-running saga over the area - formerly known as 7D lands - after a group of landholders submitted a rezoning proposal opposing some of the council's decisions.
In handing down its findings earlier this month, the panel did not support the zoning decisions for three areas called the Central Otford, North Otford and Lady Carrington Estate South precincts.
In a report to next week's council meeting, staff have recommended councillors vote to accept the JRPP's ruling on the Central Otford precinct but warned "there is no budget" for any suggested planning review, which could cost up to $30,000.
They said any new studies should be funded by the state government or private landholders.
In the case of North Otford, staff said the JRPP's recommendation was "a surprise given that [the] council's investigations since 2007 had determined that the precinct was not capable of urban development".
The recommendation was "inconsistent with their recommendation for other precincts" and could "vastly change the character of the precinct and would effectively result in the clearing of 30 hectares".
Further, extra houses would increase the suburb's density and put pressure on water, sewerage, electricity and telecommunications.
For the Lady Carrington Estate South precinct, the JRPP recommended further investigation be conducted into the environmental characteristics of land owned by Ensile Pty Ltd to see if it was suitable for development.
If these studies - which should be funded by the landowner - found development was possible, council staff said the precinct could be developed with an extra 138 houses for 425 people which would "impact on the road network and facilities".
The panel also recommended the council develop a Helensburgh town plan.
However the council said this would need to be considered "as part of its annual planning budget cycle".