Campbelltown MP Greg Warren fears a decision to substantially increase the number of homes in a Menangle Park development could set a dangerous precedent in the growing Macarthur region.
The Dahua Group has sought to increase the number of dwellings in its Menangle Park development to about 4000 and establish a high-density zone.
Mr Warren fears if concessions are made to allow the increase in Menangle Park, further increases could be expected in the Mount Gilead and Wilton growth areas as well.
"Allowing a developer to increase the dwellings cap by a third sets a dangerous precedent," he said.
"If the entire Greater Macarthur Land Release dwelling cap [of 35,000 new homes] increased by a third, that would result in close to 50,000 dwellings being built.
"Campbelltown infrastructure like public transport, health, schools and roads already can't cope."
A Dahua Group spokeswoman said the developers had worked had to deliver a good housing precinct.
"It would not be appropriate for Dahua to comment on setting precedent for other projects," she said.
"Dahua has taken a collaborative and best practice approach to planning for the long-term future of Menangle Park and the Macarthur region. This planning proposal is the result of over two years of work with Campbelltown Council, the existing Menangle Park community and other key stakeholders."
The spokeswoman said the Dahua masterplan would bring "significant benefit to the local and regional community" and the proposed changes would "enable increased diversity of housing for Menangle Park residents [and] ensure hat the community will be able to accommodate all potential residents".
"The increased density will be appropriately located in proximity to the new town centre and associated with high amenity and increased open space. The increased population will also enable the introduction of a larger town centre so residents will be less dependent on private transport while creating further job opportunities."