"Appalling" suggestion: The currently undeveloped Malabar headland could be sold to developers. Credit:Peter Rae "The site is both surplus to Commonwealth requirements and ideal for improvement through cooperation with the private sector," the business case said, estimating future development would generate an investment of "up to $1 billion" during the construction phase alone. "Divestment of the site will relieve the Commonwealth of an ongoing financial liability associated with the maintenance and decontamination of the site," it said. As much as 48 hectares, or a third of the 160-hectare headland separating Malabar and Maroubra beaches, has been earmarked within the document as suitable for possible mixed-use development following remediation. "The development could be a mix of land uses such as residential, commercial, special aged care, retail, community/government facilities such as childcare centres and libraries," it said.

By contrast, handing over the entire headland for public open space, as had been proposed by the former government, "does little to improve the economic capital of the site" and "provides limited opportunity for the private sector to contribute". "This option is unlikely to provide any return to the Commonwealth within the 3-4 year timeframe," the September document, obtained by Fairfax Media under freedom of information laws, said. Maroubra's state MP Michael Daley accused the government of concealing its true development intentions for the headland, while the Member for Kingsford Smith, Matt Thistlethwaite, called the document an "appalling breach of trust". "Before the last election there was no mention of development of the headland," Mr Thistlethwaite said. "This is the sacred green shoulder of Maroubra beach, the last remaining tract of native bushland between the harbour and Botany Bay."

The former Labor government's conservation plans for the heavily contaminated headland, parts of which once served as landfill, stalled in 2012 when the NSW Rife Association successfully fought its eviction from a 100-hectare central part of the site. But any move to transform the Anzac Rifle Range and parts of nearby bushland into one of the report's proposed "development portions" of either 15, 30 or 48 hectares would no longer face such an obstacle. Liberal Democrat senator David Leyonhjelm last month announced he had secured a deal to move the recreational shooters to an upgraded facility in western Sydney, allowing the government to "free up" $3 billion in land at the headland. Resistance would instead likely come from local MPs, Randwick City Council and community groups, who have all called for the headland to be protected from any future development. "Trying to make money out of it just doesn't wash with the community," said the Friends of Malabar Headland's Claire Bettington.

"It's something that has to be looked after, not flogged to death," she said. Nation Partners, consultants appointed by the government to lead "a strategic assessment on the site's potential", inadvertently revealed the existence of the business case in a since-deleted statement published on the company's website last year. Nation Partners managing director Matthew Nation directed questions to the Department of Finance on Wednesday. "We don't have any comment to make," he said. A spokeswoman for Michael McCormack, the parliamentary secretary to the Minister for Finance, said "the government has not yet made a decision in relation to the future of Malabar headland". "With the level of expenditure required to remediate the site it is prudent to understand land use scenarios to develop potential remediation options and cost estimates to ensure value for money outcomes for the Commonwealth," the spokeswoman said.

Although most of the costings - along with the business case's final recommendation - have been redacted from the document, the department has previously put the cost of remediating the headland at between $95 million and $150 million.