A lone tree is threatening to take down a multi-million dollar hotel development by a prominent Canberra family, who have lashed out at the "hateful" decision to protect it.

Key points: Sotiria Liangis planned to remove the tree to make way for an $11 million hotel

Sotiria Liangis planned to remove the tree to make way for an $11 million hotel The request to remove the tree was rejected because of its "important role"

The request to remove the tree was rejected because of its "important role" Mrs Liangis slammed the decision, calling the tree a "weed"

The Liangis family said the London plane tree on the commercial block of land in the prestigious suburb of Manuka was a "weed" and that its protection by the ACT Government was a "scam".

The tree has been at the centre of a long-running dispute between the family and the Government, after Sotiria Liangis lodged an application to build an $11 million six-storey hotel on a corner block in Manuka near the Capitol Theatre.

The application requested the removal of the tree's protective status to make way for the development.

ACT Conservator of Flora and Fauna, Ian Walker, on Wednesday rejected the request, saying trees "play an important role and provide many benefits".

Mrs Liangis said she would not spend any more money on the site, which currently houses a vacant building, until the tree was gone.

"It's a weed for heaven's sake," she said.

"All that block of land is full of roots.

"The tree cannot possibly stay inside my property."

But Mr Walker said a number of factors were considered in his decision to protect the tree, including public submissions, information from the developer and advice from the ACT's Chief Planner and independent tree advisory panel.

The tree in Manuka has stymied a multi-million dollar hotel development. ( ABC News: Greg Nelson )

"It is important that developments are innovative in how they incorporate — and benefit from — existing trees," he said.

"I hope that by maintaining the tree's protective status, it will continue its long life and people will further appreciate it as a natural focal point of the Manuka landscape."

The decision does not prevent development on the site, just the removal of the tree.

Tree breaks Government's own rules: developer

The ACT Conservator rejected a request to remove the tree near the Capitol Theatre. ( ABC News: Greg Nelson )

The tree was placed on the ACT Tree Register in 2012 in "recognition of its contribution to the landscape and aesthetic value".

But Mrs Liangis said the tree's protection status was against the Government's own rules.

"The tree should not be within 12 metres of a building," she said.

"It's one metre away.

"It's destroyed two blocks of land."

Mrs Liangis said the roots had also blocked a sewer on the property.

And she believed the motivation for the tree's nomination for the ACT Tree Register almost a decade ago was done out of "sheer hate".

"I love trees more than anybody put together," she said.

She said she offered to plant 30 other trees on the property in exchange for removing the large London plane.

The hotel is intended to be the first stage of a larger development, which would incorporate a bigger area and vacate the Capitol Cinemas in Manuka.

Earlier this year, the tree protection unit reportedly found a drill hole in the base of the tree.