A plan to fast-track housing on badly contaminated Defence Force land in Maribyrnong, announced by Treasurer Scott Morrison in Tuesday's federal budget, would cram in twice as many homes as had been originally envisaged for the site.

The Treasurer's plan has stoked fears within the Andrews government that the Defence Department would simply sell the land to the highest bidder without proper strategies for transport, education or other services.

ADF land in Maribyrnong has been earmarked for development as part of the Budget. Credit:Justin McManus

For more than a decade, Defence has been working with Victorian government on ways to re-develop its Maribyrnong Defence Site, 127 hectares of contaminated land on the Maribyrnong River.

Defence has said that the sprawling site – fronting the Maribyrnong River on three sides and Cordite Avenue to the south – was suitable for 3000 homes.