A $US250 million ($A324.30 million) plan by Australian businessman James Packer and actor Robert De Niro to turn Barbuda's K-Club hotel into a luxury resort has created controversy on the island.

De Niro and Packer want to renovate the K-Club, which was once visited by the late Princess Diana, Antigua and Barbuda’s consulate in New York has said on Twitter. The proposal was approved last week in a referendum by a vote of 206-175. But the fact that fewer than half…