Neighbouring residents may form a group called Protect Queenstown and appeal the Queenstown Lakes District Council's decision allowing a 750-lot residential subdivision.
The council adopted a plan change in November allowing 120ha of land 10km northeast of Queenstown, between the Shotover River and Lake Hayes Estate, to be developed for housing and small-scale retail activity.
Sheena Haywood, who lives next to the proposed development, has been a party to appeals by the Queenstown Airport Corporation (QAC), Arith Holdings and Shotover Country developers Ladies Mile Ltd since proceedings began in March last year.
QAC and Arith Holdings withdrew their appeals last week, but Ms Haywood said she and "several other concerned residents" were looking to take action within the next two weeks.
"We are not opposed to development, but can't understand the stupidity of the council being won over by the theory that this housing will be affordable and the theory that this is the right place to do it, when it goes completely against the district plan and completely against the advice of their own planners."
The main concern was the overpopulation of the valley, which could cause sewerage, roading and environmental issues, she said.
The issue for Protect Queenstown was the number of developments being given the nod by the council before other developments had been given time to flourish.
"There is not the demand for this right now.
"Jacks Point can't even give a section away.
"When we are bulging at the seams, then we can go ahead."
Last week, QAC told judge Jon Jackson in the Queenstown Environmental Court it was withdrawing its appeal against the council's decision because it came to a private agreement with Ladies Mile Ltd in regard to airport noise issues.
Arith Holdings Ltd, the developers of the nearby Jack's Point subdivision, also gave a notice of withdrawal after reaching an agreement with the developers.
However, Ladies Mile is still appealing the council's decision to disallow development of a further 150 residential sections on "flood-affected land" within the proposed Shotover Country development.
The council was having flood/engineering information peer reviewed and would then decide how best to progress the appeal, council lawyer Jayne McDonald said.
She expected the matters would be resolved without the need for an Environment Court hearing.
Ms Haywood said she was unsure what action Protect Queenstown would take, but it had 14 days to decide whether to take over Arith Holdings' or QAC's appeals, something she was able to do because she had been an interested party to them.
