Luna Park is pushing to allow petting zoos, jumping castles and ice-skating rinks on land next to harbourside apartment blocks, under the most recent plans triggering a dispute between the park's operators and residents.

The fun park's operators want to keep using Lavender Green, an outdoor lawn area stretching between Sydney Harbour and apartments at Milsons Point, for events as well as temporary rides and amusements.

Luna Park operators want to keep using a patch of green space adjacent to the Milsons Point site for small rides and amusements. Credit:James Alcock

Luna Park managing director Peter Hearne says the use of the area overlooking Lavender Bay is necessary to ensure the business's viability, while residents argue it will be noisy and encroach on views and green space.

"What we're proposing to do on this block of land is nothing different to what we've been doing for the past 16 years," Mr Hearne said.