The Hunter has again trumped the Illawarra with Wollongong denied crucial state funding through the Resource for Regions program.

The city's only application, for Mount Keira Summit Park infrastructure, was knocked back while seven Hunter projects worth $70 million have been shortlisted.

Wollongong had hoped to secure just $3.5 million to install utilities at the Mount Keira site, but missed out behind 10 other areas under the scheme designed to help mining-affected regions.

This "slap in the face" for Wollongong was criticised by Wollongong Lord Mayor Gordon Bradbery and Keira MP Ryan Park.

Cr Bradbery said the decision by the Independent Assessment Panel to overlook Wollongong was another blow to a region in need of funding.

"I was pretty confident that we would get a look-in because we failed the last time," he said. "I'm pretty disappointed, more specifically, that Newcastle gets another $12 million."

Minister for the Illawarra John Ajaka refuted suggestions the funding had been distributed along geographical lines. He said the application put forward by Wollongong City Council was responsible for the city's failed funding bid.

"Resources for Regions funding is for projects that will provide infrastructure to accommodate population growth in mining-affected communities - and not for tourism purposes like the Mt Keira Summit Park project," he said.

The latest setback comes hot on the heels of moves to secure $2 billion for three "game-changing" Illawarra transport projects.

A consortium led by Regional Development Australia (RDA) Illawarra, made up of Wollongong, Shellharbour and Kiama councils, the Illawarra Business Chamber, Destination Wollongong and the Property Council, recently met to sign its official transport wish list.

Three long-awaited projects - the M1 (including the extension to St Peters and the Albion Park Rail bypass), a rail upgrade to allow a 60-minute train journey to Sydney and the construction of the Maldon-Dombarton freight line - made the list.

It wants the government to fund the projects from the $20 billion sale of power poles and wires.

The group will ask the government to start construction on the M1 between Waterfall and St Peters by 2020 and the Albion Park Rail bypass by 2017.

The RDA's wish-list follows Kiama MP Gareth Ward's earlier meeting with the councils to hear their regional priorities.

Wollongong councillor Chris Connor told the Advertiser that while he was politically against the selling of poles and wires, the city supported the Maldon-Dombarton line, M1 upgrade and Albion Park Rail bypass.

"From our own point of view, the work to do with the development of Mount Keira as a tourist destination is important," he said.