The future of Sydney’s Cockatoo Island is back in the news, with a proposal to attract private investors already stirring deep emotions here in the harbour city.

The federal government is now considering whether to change existing planning rules and sell long-term leases of the island to private interests.

Proponents say these changes will attract the cash needed to develop the site as a key tourist destination and valuable asset for the city.

But without careful planning rules, opponents including Opposition Leader Anthony Albanese fear private development of the landmark could easily turn into an ugly Sydney property scandal.

The jewel of the western end of the harbour, Cockatoo Island is home to both world heritage-listed convict-era buildings that date back to 1839 and unique industrial structures from last century when it was Australia’s great naval shipbuilding base.