Australia's most notorious member of local government could lose millions on a scuppered apartment project after being stripped of his official position.

The woes of former Auburn Council deputy mayor Salim Mehajer continue to augment, with a multi-million dollar apartment development left in limbo following the NSW government’s decision to veto the sale of a council car park.

Mehajer plan to develop a 96-unit apartment complex on the site was contingent upon the purchase of a car park owned by Auburn Council – a deal which it approved last December while he still held the position of deputy mayor.

The NSW government has since decided to suspend Mehajer and his fellow councillors from their positions, while the administrator appointed to handle official duties in their stead has opted to rescind the car park sale.

The value of each unit in the proposed apartment complex would have been over $100,000, netting estimated profits of more than $10 million for the Mehajer family.

It was the decision by Auburn Council to sell the car park to Mehajer in December that prompted strong concern within the NSW government.

The deal was first settled in 2011, but cancelled by a council vote in November due to the lack of an approved development application.

Just a month subsequently the council decision to rescind the deal was itself reversed, paving the way for Mehajer to acquire the car park and proceed with his multi-million dollar apartment development.

While the price of the car park had reportedly been raised to $8.5 million, a number of councillors complained that this figure was still well beneath current market value, and that other valuations pointed to a figure of as high as $13 million.

Mehajer’s detractors in local government are delighted by the cancellation of the car park sale, with administrator Viv May’s decision greeted by applause in the meeting chamber.

Former councillor Irene Simms said she was “over the moon” about that the decision, which would bring about “the right result for the community,” while Labor’s George Campbell said that the land should not be sold under any circumstances – and particularly not to a councillor for a price well beneath fair market value.

The site, and thus also Mehajer’s apartment development, will remain in limbo until the fate of Auburn Council is settled, in a process which could take well over a year.

Mehajer and his family are determined to proceed with the development, however, stating that the higher valuations are erroneous and that the matter would be taken to the courts.

Mehajer’s wife Aysha had previously written to the Local Government Minister Paul Toole to request that the council not be suspended on the grounds that it would result in “extensive delays to building the property or even mean it would have to withdraw from the development altogether.”