The family that owns the bombed Sari Club site in Bali has demanded $9 million in compensation — on top of the $4.9 million price tag already agreed for the land — before it will commit to a sale.

Key points: The owners justified their demand for an extra $9 million on the grounds a restaurant could not go ahead

The owners justified their demand for an extra $9 million on the grounds a restaurant could not go ahead The Bali Government offered a land swap as a solution, but that was rejected by the owners

The Bali Government offered a land swap as a solution, but that was rejected by the owners The Bali Peace Park Association has been trying to buy the land for years

The $14 million demand brought a sour ending to yesterday's protracted meeting with representatives of the Bali Peace Park Association and could ultimately dash longstanding hopes of building a permanent memorial on the site to honour the victims of the 2002 Bali bombings.

The meeting included representatives of the Bali Government, Indonesia's Foreign Ministry, the Badung regional tourism authority, and the Australian consulate in Bali.

The Bali Peace Park Association had gone into the meeting with hopes the owner might accept a land swap as a solution, after the Bali Governor Wayan Koster had proposed another bigger site nearby be offered instead, thereby freeing up the Sari Club site for sale.

But the ABC has been told the owners rejected that idea out of hand and were only interested in negotiating a maximum price for the Sari Club land.

Bali bombing survivors visit the Sari Club after the devastating 2002 Bali bombing that killed their friend Billy Hardy. ( Supplied: Jayson Pate )

Initial reports after the meeting said the owners had agreed to sell the 700 square metres site for $4.9 million.

However, as the meeting wound up, they demanded an extra 90 billion rupiah, or $9 million, as compensation for the five-storey restaurant they had planned to build on the site.

The price tag is only for the front plot of land where the Sari Club stood until a car bomb destroyed it in October 2002.

It does not include a larger 800 square metres site directly behind it, which is not up for negotiation. But the price is still far less than the $5 million price tag put on the top floor of the five-storey restaurant if it were built.

Monetary pledges might come to nothing

This larger site has been offered to the Sari Club owners as an alternative for the development. ( ABC: Ambros Boli )

The Bali government issued a permit for the restaurant last December, and construction was due to start this month. But the owner agreed to suspend plans to re-enter negotiations with memorial advocates.

The Perth-based Peace Park Association has been trying to buy the land for years but has had limited funds and could never agree on a price with the owner.

Their hopes were buoyed last week after a meeting in Perth with Prime Minister Scott Morrison, who it is understood threw his support behind the negotiations.

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The very fact that the Peace Park Association could suddenly offer $4.9 million to buy the site suggests the Prime Minister offered to commit substantial funding, assuming the site could be bought at a fair price.

Previously the Rudd government had committed only $450,000 towards a peace park, later matched by similar donations from state and territory governments.

In the end, these monetary pledges might come to nothing.

Site future up in the air

The site of the bombing at the Sari Club is now effectively a carpark. ( ABC News: Phil Hemingway )

The ABC has been told that the site's owners opened yesterday's meeting with a demand for $26 million — the exact same price tag they'd asked for more than a decade ago, when negotiations first began.

They later lowered the price to $4.9 million, on the grounds that one ARE (100 square metres) was worth $700,000 at local market value in Bali.

Peace Park Association representatives scoffed at that price, saying market value for land in Kuta was less than half that amount, and had barely increased in years. They offered $3.5 million in return, which the owners rejected.

However, the Peace Park Association eventually agreed to the owner's demand of $4.9 million for the 700 square metres site, and also offered to include the family's name on a memorial plaque once the peace park was built.

Candles representing those killed in the Bali bombings come together to form a number 88, the amount of lives lost in the 2002 bombing. ( Supplied: Bill Hardy )

But the owners baulked, and demanded the $9 million on top of the agreed purchase price.

They justified the demand on the grounds that the five-storey restaurant could no longer go ahead. They cited money already spent on a building licence and other materials, and said the family had made commitments to an investor.

As a last-ditch bid, the Peace Park Association offered $500,000 in compensation, which the owners rejected.

The meeting broke up without a deal, leaving new questions about the site's future.

The owner has agreed to suspend construction at the site for three days, to allow further negotiations, although it's unclear whether more talks are likely.