Village referred its project for between 3500 and 4000 homes under federal legislation in October 2010. But a month later it asked for a decision to be deferred.

In December 2010, Village asked for another deferral, for six months, and then withdrew the project from the referral process in July 2011.

The company now says it doesn't need the federal approval.

This month the NSW government approved a scaled-down South Tralee for 2000 new homes after a decade of debate and legal action. The decision caused an uproar from the Canberra Airport and federal Transport Minister Anthony Albanese, who fear complaints of aircraft noise by Tralee residents will threaten the airport's curfew-free status and constrain its growth.

Canberra Airport managing director Stephen Byron said the area of development may have been reduced but Dunn's Creek Road at Tralee hadn't been altered.

''That's where a significant proportion of the woodland is located,'' he said. ''Areas as little as five hectares have been referred under the act.

''You'd have to seriously question the grounds on which Tralee would not be referred.''

Correspondence obtained under freedom of information shows a meeting of federal environment officers and Village staff in November 2010 discussing the development's potential to be referred to the Environment Minister for approval.

According to the Department of Sustainability, Environment, Water Pollution and Communities, the project's potential impacts on threatened species were likely to trigger referral to the minister.

A referral can lead to different results, including the Minister finding unacceptable impacts on nationally significant matters and stopping the development.

Village said a deferral would enable changes to lessen the potential environmental impacts and hence likelihood of involving the Environment Minister.

Documents also reveal Village asking for the project to be assessed in stages, because development would take 20 years.

The department wanted the total development assessed in one go.

Matters of national environmental significance that could attract federal scrutiny are impacts on white box-yellow box-red gum grassy woodland and derived native grassland and the pink-tailed worm lizard.

A memo from Village's John McFadden about the discussions says: ''It was suggested that we need to get our proposed removal of woodland to below (5 hectares) and preferably down to 2 hectares to be confident we can avoid the matter being referred to the Minister.'' In a statement on Wednesday, Village said referral under the federal Environment Protection and Biodiversity Conservation Amendment Act was unwarranted.

''Numerous environmental studies have been undertaken on South Tralee since the rezoning process commenced in 2002 by consultants engaged by the NSW Government and Queanbeyan City Council,'' the statement said. ''Approximately half of South Tralee has recently been rezoned Environmental Conservation in compliance with NSW Environmental Assessment and Protection Act.

''An environmental consultant has recently confirmed, 'as the subject land identified for development does not contain matters of National Environmental Significance, referral to the Commonwealth Minister for the Environment, as provided for under the EPBC Act, is therefore not warranted'. Any claims to the contrary are without foundation.''

Village declined to identify the consultant. A spokesman said he was among consultants engaged by the NSW government and Queanbeyan Council.

''The current application is for South Tralee only and was scaled back by NSW Planning, and not Village,'' he said.