TWEED Shire Council is set to be stripped of its planning powers for the biggest-ever proposed development on the Tweed Coast.

The NSW government yesterday warned the council it is considering declaring the development site as "state significant".

That would allow it to take over planning control for the 1064-hectare precinct south of Kingscliff after more than eight years of wrangling over stalled plans.

The move would also rob the council of development application fees worth thousands of dollars which would go to the state government.

The government action was welcomed by major developer the Leda Group, which now hopes to sell the first of 4000 Kings Forest blocks by the end of 2008.

The council's chief administrator Garry Payne said he understood a letter advising of the minister's decision was on its way to the council's acting general manager Mike Rayner.

However, late yesterday Mr Rayner said he had not yet received notification.

Mr Payne said he was not surprised at the move "because of the size, nature and significance of the project".

But he did not see it as a criticism of the three administrators, who decided last week to further defer a decision on planning rules for the development.

Mr Payne said he hoped council could co-operate with the NSW Department of Planning.

Leda Development's regional manager Reg Van Rij said the company had lost all confidence in the ability for there to be an outcome at council level.

"We are very happy. Projects of this type, given their complexity and also by virtue of their political component, are perhaps beyond the ability of local councils," he added.

NSW Planning Minister Frank Sartor said listing the site as state significant "would provide planning certainty to control the type and scale of any development and the appropriate level of environmental protection".

He said any proposal to list the site as state significant would first be put on public display.

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