Toxic groundwater will be investigated in the industrial area of Fishermans Bend – which is to be redeveloped as four new residential suburbs – almost three years after a secret state government report detailed soil and water-table contamination.

The report, kept confidential until recently, was completed just before the now Opposition Leader Matthew Guy announced the rezoning of the Fishermans Bend Urban Renewal Area.

Helen Halliday and former Port Phillip councillor David Brand, from the Fishermans Bend Network group, outside contaminated land in South Melbourne. They want better planning for the new area. Credit:Luis Ascui

The rezoning doubled or even tripled land values overnight, but failed to set aside infrastructure like parks that could cost taxpayers hundreds of million of dollars.

Now, the Environment Protection Authority has launched an investigation into toxic groundwater across the massive site, used since the mid-1800s for some of Melbourne's most intensive industrial activity.