''We are asking for the world to come knocking on our door and let us know what … we can do with an area that has been much ignored but has much opportunity,'' he said. A rail corridor between Central and Eveleigh will be built into high rises and the space over rail lines will be developed. ''We have a dead space, we need a new heart … It presents an engineering and redevelopment challenge that has not existed in Sydney for decades.'' It continues the O'Farrell government's top-down approach to infrastructure provision, which began by inviting private-sector ideas for the redevelopment of Darling Harbour, and allows it to pass on the cost and risk of the project. Building over rail lines is expensive, also raising the prospect that very tall buildings - perhaps about 70 storeys - would be required to make the project viable.

Central and Redfern stations would be redeveloped, parks would be created and the project would allow for hotel development and university expansion. Mr Hazzard said the 15- to 20-year project would create more homes and jobs close to transport links and eradicate the ''Berlin Wall'' effect that had divided suburbs on either side of the rail tracks. Similar projects have been carried out in London, New York and Paris, and proposals to build over rail lines and develop rail land in Sydney are not new. But Mr Hazzard said that Sydney was ''now in a global city market where this is an economic likelihood''. He said the return to taxpayers for handing over public land would depend on the type of development proposed. Putting rail lines underground was a possibility, he said.

Sydney lord mayor Clover Moore said the project would help connect the city and provide future capacity for employment, productivity and growth. But she said the plan will ''take years and it needs a strategic approach to succeed''. She said: ''A major proposal like this needs to go through a proper public process.'' Geoff Turnbull, head of the Redfern-Waterloo residents group REDWatch, said the community had not been consulted on the plan, undermining the government's promise of more consultative development. Urban Taskforce chief executive Chris Johnson said the plan was a ''bold move'' that would change the character of the southern end of the city.

''The government must champion this dramatic change as local action groups will almost certainly want to reduce the impact of new development,'' Mr Johnson said. Demand for offices at the southern end of central Sydney is lower than elsewhere in the city and commercial space can offer lower returns to developers than residential space. But creating employment land near the city's burgeoning residential population is considered vital and Mr Hazzard said the government would ''strike a balance'' between the two. The government said the project would allow new infrastructure to support rail services. Loading

But Greens MP John Kaye said the plan would strain Central Station's capacity and make future upgrades more difficult. The government's development agency UrbanGrowth NSW will lead the project. Expressions of interest will be sought later this year.