Receivers at Ernst and Young confirmed they have been appointed to manage companies controlled by property developer Hardie Holdings, which set up the zone and in 2002 won approval for an 870-hectare industrial park in forest 30 kilometres west of Newcastle in the Cessnock City Council area.

An Ernst and Young spokeswoman said the companies controlling the Hunter Economic Zone had been placed into receivership, "after defaulting on loan obligations".

When the Government approved the creation of the zone in 2002, former deputy premier and planning minister Andrew Refshauge called it, "the biggest new economic zone in the State" and predicted it would attract investments that "could exceed $2 billion".

The idea was to attract large-scale job-generating developments and Dr Refshauge mentioned there was one company interested in investing $300 million in a project that could create 240 jobs.

The large water reservoir built on the site has never had the industries it was intended to serve, with only a handful of businesses moving there.

Professor Phillip O'Neill, who advised Cessnock council on potential uses for the land and is now director of the Urban Research Centre at the University of Western Sydney, was not surprised the zone had gone into receivership as he said the site had never had enough infrastructure to attract investors.

"If there's a lesson from the HEZ site it is that ideal land alone won't attract quality investment," he said. "Norwest Business Park and Sydney Olympic Park show investors will move when there's high-quality infrastructure in place."

Hardie Holdings declined to comment last night.

NSW Minister for the Hunter Jodi McKay was unaware it had been put into receivership 10 days ago.

The news sparked a bitter blame game between Cessnock Labor MP Kerry Hickey and the Cessnock Greens Cr James Ryan.

"I find it amazing [Cessnock] council . . . has a draft [local environment plan] and the HEZ isn't in it," Mr Hickey said.

"I think that speaks volumes about the council's attitude towards it."

But Cr Ryan said the HEZ was included in the [environment plan] but had been a "white elephant" since its rezoning in 2002.

Vice-president of the Kurri Kurri business chamber Toby Thomas said it was vital the HEZ went ahead.

"It's to help Kurri get out of the handout mentality so it can stand on its own two feet," he said.

"It needs its own powerful local economy in its own right." - with SMH