The NSW government has been accused of wanting to "screw" Parramatta Council over the value of land earmarked for the new Powerhouse Museum.
Parramatta's former lord mayor, Paul Garrard, said the proposed site of the museum on the banks of the Parramatta River was a poor choice.
He said the NSW government wants "to screw the local council by saying we'll take your land off you, probably give you nowhere near the value of the land on the understanding we're bringing culture to western Sydney".
"That's just rubbish," he said. "It's a bad option all round because the people aren't winning.
"They're not getting the value of the land on the riverbank. They're getting a poor site for the museum.
"And at the same time, the museum could complement the tourism focus and opportunities that relate to the North Parramatta heritage precinct."
Mr Garrard estimated the site proposed for the Powerhouse was worth about $150 million.
Neither the NSW government nor Parramatta's administrator would reveal how much they thought the site was worth.
Nearby is the 170-metre Altitude development, a 54-level residential tower containing 375 apartments that will be the highest building in Parramatta.
"It comes back to what yield you get on the site," Mr Garrard said. "How big you want to go on it. How tall you want to go."
He said the former deputy premier and arts minister, Troy Grant, did not accept other sites proposed by the council such as the Arthur Phillip High School and Parramatta golf course.
He also said there was an "enormous amount of land" available in North Parramatta, which is earmarked for residential development. This has triggered a fight with the North Parramatta Residents Action Group, which accuses the government of "vandalising" one of Australia's most important historical sites.
Mr Garrard said the council was already under financial stress to build a new swimming pool, which could cost up to $50 million, because of the NSW government's plan to demolish its existing pool to make way for a new sports stadium.
A councillor since 1974, Mr Garrard served six terms as Parramatta Lord Mayor, including until May 2016, when the council was sacked under forced council amalgamations.
Arts NSW spokesman Martin Portus said the NSW government was in "constructive negotiations with the City of Parramatta, the current major owner of the site, over the best way to acquire the site".
However, the council is currently under the rule of an administrator, Amanda Chadwick, appointed by the Baird government on an annual salary of $320,000.
She is the daughter of former NSW Liberal minister Virginia Chadwick.
Amanda Chadwick declined to answer questions but issued a statement saying the new council was working closely with the NSW government to build the Powerhouse.
Mr Garrard's criticism adds to concerns about the riverfront site chosen for the $1 billion Powerhouse.
Robert Borsak, of the Shooters, Fishers and Farmers Party, said during the parliamentary inquiry into museums last year that the proposed site was subject to flooding.
Mr Borsak also suggested to Powerhouse director Dolla Merrillees the proposed site was substantially smaller than the museum's current location in Ultimo.
"Ms Merrillees, as a long-standing professional museum director, do you ask this committee to believe that you can squeeze the enormous objects currently on display at Ultimo into the footprint at the new site at the Parramatta car park?" he said.
