The government has referred the findings of a review into potential corruption involving a lease over the site. After persistent lobbying from residents, the state government announced the review in April into the circumstances in which a 50-year commercial lease was granted over the site and transferred to private developer CSKS Holdings.

Former Labor minister Tony Kelly, who has been found corrupt by the ICAC in an unrelated inquiry, was lands minister at the time some of the decisions were made but others were made after the 2011 election when Labor was swept from power.

In mid-2006, the Department of Lands announced a proposal to sell the land to the bowling club without a public tender. Included in the deal was a parcel of the adjacent Trumper Park. CSKS Holdings, then called Paddington Bowling and Sporting Club, had taken out an option to buy the land from the club.

''This position is clearly at odds with ICAC's 1997 guidelines with respect to the purchase or disposal of assets by direct negotiation,'' the council's community and environment committee wrote at the time.

Greens MP David Shoebridge said: ''The government must now withdraw their consent to the development until the matter has been considered by ICAC.''