A letter tabled at the June 21 Wyndham Council meeting details significant risks from high-nutrient loads in the run-off from Werribee South farms, which is channelled to Port Phillip Bay via the Duncans Road Drain. Arguing treatment was no longer viable, the developer reneged on a deal struck for an 11-hectare wetlands to treat run-off from Duncans Road, as well as residential and tourism activity in Wyndham Harbour.

The developer, Altair Property Group (formerly Prudentia Investments), warned of 'blue-green' algal blooms forming in the pondage as a result of excessive nitrogen loads from farm fertilisers and products.

The letter also flagged possible 'nuisance conditions' including odours, visual impairment and potential impact on aquatic life.

With the council backing the planning amendment - which eliminates a key feature of Wyndham Harbour's sustainable-design image - environmentalists have slammed councillors for allowing the development to stray from the initial plan approved by a 2006 Environmental Effects Statement inquiry panel. Western Region Environment Centre's Harry Van Moorst and Green Wedges Coalition's Rosemary West have formed a united front, calling for the release of the developer's study. "If the nutrient-levels really are that high then we want to see the figures because something needs to be done; if not, this is a shonky justification for getting out of the wetlands," Mr Van Moorst said.

He said the wetlands were a key component of initial consultations. "If the community can't get access to information being used by decision-makers to change the face of a development, then they [council] are not acting in the interest of the community."

The EES panel concluded that the key planning authority, Wyndham Council, would need to be "vigilant" in ensuring the plan remained intact.

Council CEO Kerry Thompson said it was not legally required to disclose the water-quality study. She also said further consultation would not be required until a rezoning application was formally lodged.

Both the Environment Protection Authority and Southern Rural Water would not comment on reports from the study, but were informally notified, according to council minutes.

The Green Wedge Zone land initially mooted for a wetlands has been cut to 1.3 hectares, with the remaining area subject to a rezoning being pursued through the state planning department.

Altair Property Group has proposed to treat stormwater from the development - but not Duncans Road - in the reduced green wedge area.

While the developer has not yet formally lodged a re-zoning application, its website currently features a promotional video that depicts housing on green wedge land.

Other changes include a reduction in the size of the northern beach from 1.4 hectares to 1 hectare, and the inclusion of a car park into area dedicated for open space.

Wyndham Harbour project director Sonya Miller said the developer was exploring alternatives to the 11-hectare wetlands.