A DELICATE tract of land on the northern beaches is being investigated for development by the State Government, even though government planners say it is not necessary to develop it to meet housing targets.

The National Parks Association of NSW fears the bushland, known as the Narrabeen Lagoon catchment and home to several endangered species, has been earmarked for "economic outcomes" by the Department of Lands.

"We don't like the philosophy that you sell off or lease out bush so that you can save the rest," said a local association member, Judith Bennett.

Earlier this year the Herald revealed that the department was selling or leasing parks in coastal locations along the NSW coast to fund State Government maintenance of harbours, jetties and foreshores.

The plan to develop part of the bush has been around since at least April 2005 when then-environment minister, Bob Debus, described the Narrabeen Lagoon catchment as being a "haven for residents along with nature and sport lovers".

Threatened species, including the giant burrowing frog, Rosenberg's goanna, the southern brown bandicoot and the eastern freetail bat were all resident close to the lagoon, Mr Debus said.

At the time, the Government planned to set aside only 70 per cent of the area, or 450 hectares for environmental protection, while investigation would continue for the remaining 170 hectares. But since then, another government agency, the Department of Planning, has said that it is not necessary to develop land that it has tagged as non-urban, which includes the catchment.

"There is no necessity for the development of non-urban lands … to meet the dwelling targets … for 2031," the Department of Planning's subregional plan for the north-east of Sydney says.

In 2006 a senior official in the Department of Lands wrote to a private consultant that negotiations would start with Warringah Shire Council to "achieve appropriate rezoning to optimise the environmental, social and economic outcomes for the future use of this land".

The private consultant's report found that most sites were "highly constrained by bushfire hazard" but a handful of sites could be examined with a view to making a rezoning request.

One site within the catchment is privately owned. The others are owned by the Metropolitan Aboriginal Land Council, Telstra and the State Government.

In response to the private consultant's report, Warringah Council wrote that the land was "inappropriate for rezoning" because it was "inappropriately zoned for residential development and have a range of land constraints".

Among the problems with rezoning, the council identified strong community opposition to redevelopment of one site around Wheeler Creek. On other sites, it identified potential koala habitats, and bushfire risk to peppermint- angophora forest and bloodwood scribbly gum woodland, both potential threatened species habitat, making "residential redevelopment inappropriate".

"The Department of Lands should not be in revenue raising," Ms Bennett said.