The NSW government has rejected federal government claims a decision to build homes near Canberra Airport will stymie its use as a second airport for Sydney.
The state government is set to approve the rezoning of the Tralee Housing Development to allow 1000 new homes south of Queanbeyan in a $400 million venture.
Federal Transport Minister Anthony Albanese says the move undermines NSW Premier Barry O'Farrell's plan to use Canberra Airport as a second hub for Sydney.
But NSW Planning Minister Brad Hazzard disagrees.
"In fact everything we have done today allows that possibility still to occur," Mr Hazzard told reporters in Sydney after announcing the rezoning plan on Tuesday.
He said the development was "logical, sensible, and merit-based", striking a balance between allowing Canberra Airport to grow while delivering much-needed housing to the area.
He accused Mr Albanese of being out to score political points.
"The only issue he's been particularly interested in was having a political mudslinging fight today," Mr Hazzard said, adding that the move was supported by other ALP politicians such as local federal Labor MP Mike Kelly and NSW opposition planning spokesman Steve Whan.
However, Mr Albanese said the move showed Mr O'Farrell's plan to use the airport as a second hub was "farcical and completely contradictory".
He also queried the timing of the NSW government's announcement.
"Melbourne Cup day is known among politicians and journalists as one of those days known as `put out your trash day'," Mr Albanese said.
He has refused to rule out court action over the issue, saying he had already appealed to the state government to review the decision.
Mr Albanese said passenger traffic at Canberra Airport was forecast to grow by 36 per cent in the next decade, with an average 97 flights a day over the Tralee area.
There was no curfew at Canberra Airport so residents under the flight path would be affected by aircraft noise around the clock, he said.
ACT Chief Minister Katy Gallagher said she hoped the federal government would do what it could to avoid such an outcome.
"But I think from the ACT government's point of view, there is very little we can do," she told reporters in Canberra.