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Earlier this week, developer Lane Hocking submitted an expression of interest to the Queenstown Lakes District Council showing a 400-section development rather than the 1000-section development he had initially suggested.
However, Keep Hawea Beautiful spokesman Tim Ryan yesterday described the proposal as "questionable", because it denied the land to be developed was visually sensitive, ecologically sensitive or productive.
"There is zero evidence to these claims and it seems to be a statement that suits his agenda," Mr Ryan said.
"There is zero consideration of the people that the expression of interest directly impacts - the Hawea community."
Mr Ryan said he had collected more than 400 signatures on a petition opposing the special housing area.
"There is strong opposition to the plan and it should be scrapped."