An artist's impression of the interior of one of the underground oil tanks that will be turned into an exhibition space. Credit:Art Gallery of NSW Sydney Modern Project "That's the big issue. We've lost over the past 100 years 10 per cent of the gardens as a result of the Eastern Distributor, the Cahill Expressway and a few other things," Mr Austin said. "We feel that we are getting death by 1000 cuts, but they all hurt. We are very much against it, I've got to say." The Sydney Modern project was likely to resume about 11,000 square metres to the north east of the gallery, he said. Ken Boundy, the chairman of the Royal Botanic Gardens and Domain Trust, which owned and governed the land, said his organisation had been co-operating with the Sydney Modern project.

Friends of the Botanical Gardens volunteer, Ken Swinburne with Marketing Manager Louisa Goodall and CEO, Debbie Mills. Credit:Cole Bennetts Yet Mr Boundy said the trust's support was "always conditional on getting compensation for the land we are giving up, and those negotiations are continuing". Mr Boundy would not discuss what form that compensation might take. "Suffice to say that some compensation for the loss of 11,000 square metres of green space is definitely in order," he said. Environment Minister Gabrielle Upton had shown "serious intent" for a successful outcome in the negotiations, he said. Were the government to agree to compensate the trust, some form of financial help might be provided. The trust, like other state agencies, has been subject to efficiency dividends that have forced it to increasingly rely on generating its own revenue. Mr Boundy said the site of the Art Gallery's expansion had likely been locked in.

Mr Austin, however, said that if the gallery were to expand it should be to the south, toward the Domain, rather than north to the harbour and the gardens. "I'm told by the gallery that their architects have looked at the south and they don't see it as an acceptable way to go." John McInerney, a former City of Sydney councillor and an architect, disagreed with this perspective and said extending the gallery to the south could compromise playing fields in the area. "They're just used all the time," Mr McInerney said. "And they're the only active playing fields in the whole northern end of the city." "But even more telling is the benefit of moving north, where the new gallery, the proposed gallery, can link into the underground oil tanks that are in the ground there.... that opens up an extraordinary series of spaces," he said. "I think it's terrific, really."

A spokeswoman for the gallery said most of the site would be on "under-utilised grassed concrete platforms – one on the Cahill Expressway and the other the roof of disused former WWII oil tanks". Nevertheless, at the expansion site on Tuesday, the chief executive of the Foundation and Friends of the Botanic Gardens Debbie Mills said she saw a large group of people exercising at the site. "But even if I didn't see that, it isn't about whether we use it or not," Ms Mills said. "Just because it isn't being used doesn't mean it isn't valuable." The gallery's spokeswoman said a range of sites for the expansion were considered as part of its strategic master plan between 2007 and 2011, and that consultation would "broaden in the lead-up to the planned submission of a State Significant Development Application in the coming months." A spokesman for Ms Upton said: "Negotiations are continuing over the land arrangement. The Art Gallery expansion is a great project for Sydney which will also benefit the garden."