The Queensland government has stepped in to resolve a dispute over a controversial $1.2 billion resort and housing development off Gladstone.

In May, Gladstone Regional Council rejected plans for the sprawling development on Hummock Hill Island, citing environmental and other concerns.

State Development Minister Cameron Dick on Tuesday said he’d given the Coordinator-General the right to decide on the resort’s fate.

He said that would head off a long and costly court dispute after developers Eaton Place Pty Ltd lodged an appeal against the council’s decision to reject the development.

“Using step-in powers a new decision should be concluded in a matter of months,” he said in a statement.

“… the Coordinator-General will now undertake a new and comprehensive assessment of the development application.”

It followed Eaton Place’s decision to file an appeal against the council’s rejection of the offer with the Planning and Environment Court.

Eaton Place managing director Peter Scarf said the company welcomed the announcement and were committed to working with the state government and Gladstone Regional Council.

“The Pacificus Tourism Project has already been granted all necessary Commonwealth and state environmental approvals via public EIS processes,” he said in a statement.

Gladstone Regional Council has been approached for comment

The proposal is for an integrated, master-planned resort on Hummock Hill Island in Rodds Bay, 30km southeast of Gladstone.

Plans include resort hotels, holiday units and camp grounds for 2800 people, potential permanent housing for up to 1200 people, education and village precincts, boat ramps, a golf course, retail outlets and a bridge to the mainland.

The government said the project, if approved, would generate an average of 190 jobs a year on the island over the 17-year construction period, and deliver 700 direct tourism and related industry jobs when fully developed.

By Tracey Ferrier