South Coast MP Shelley Hancock has backed the Planning Assessment Commission's decision to delete the golf course and 300 residential blocks from the proposed Shaolin Temple development at Falls Creek.
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"Honestly, I think PAC has got it right," Mrs Hancock said this week.
"If the Shaolin group walks away from this, they were never really committed to it. They have got everything else they wanted.
"And if they do walk, it will confirm it was a pseudo urban development."
Ms Hancock said a substantial development had been approved.
"It remains well-positioned to allow a substantial tourist development to occur at the location.
"It has still got a temple with residential accommodation, the Shaolin Martial Arts Training Centre, including the health and wellness centre, the four-star hotel and village centre.
"There are a number of substantial attractions and I don't think PAC is being unfair at all."
She said PAC had determined the golf course could pose a risk to water quality.
Shoalhaven Mayor Joanna Gash expressed her disappointment at the PAC's decision and said it had created serious doubts as to whether the $360 million project would proceed.
Cr Gash said she was extremely concerned the PAC and state government "would think a degraded wildlife corridor was of more importance than local jobs and a unique and innovative tourism complex".
"I was disappointed by the attitude of the Planning and Assessment Commission throughout the approval process; there was not one stage in which they fully grasped what the project was all about.
"However, the state government had no issues in approving the Packer development at Barangaroo, which is of no benefit to regional NSW, in six months," she said.
