Published November 19, 2014 - Leesha McKenny, urban affairs reporter

The state government has backed away from the Treasurer's claim that it expects to build 16,000 homes at the Bays Precinct, but Greens MP Jamie Parker says the figure must have come from somewhere.

The state government has backed away from the Treasurer's claim that it expects to build 16,000 homes on a prime stretch of Sydney's inner harbour.

Premier Mike Baird has assured an international summit on the future of the Bays Precinct they were working with a "complete and utter blank canvas" when considering the 80-hectare sweep of public land between the Sydney Fish Market and White Bay.

"We're asking you, the best minds in the world with the best domestic minds coming together to say what can be achieved in this space. And I assure you that it is a complete and utter blank canvas," Mr Baird said.

The Premier's remarks come a day after Treasurer Andrew Constance told a curtain-raiser to the two-day gathering of "celebrity city builders" that Sydney's biggest urban renewal project since the Olympics was expected to accommodate 16,000 homes.

"The Bays Precinct Urban Renewal is expected to create approximately 16,000 dwellings for the state," Mr Constance told a finance and investment summit on Tuesday.

Planning Minister Pru Goward also used her opening remarks to Wednesday's summit to repudiate Mr Constance's figure.

"We are a city where almost everyone aspires to live close to our sparkling harbour, although I must say we've never set 16,000 people as a target," Ms Goward said.

It was the second time the government has sought to distance itself from comments made by the Treasurer, who told an industry breakfast in October that Sydney's 41 councils should be reduced to just five.

Mr Baird was forced to clarify that Mr Constance had "expressed a personal view" and "that's not the government's view" as the remarks sparked an angry response from the local government sector.

Sydney Lord Mayor Clover Moore, who was attending Wednesday's summit, said Mr Constance's latest remarks were "totally inappropriate".

"I don't believe long-term planning should be announced by the Treasurer at the beginning of the planning process," Cr Moore said. "This is really pulling the rug out from under the feet of all the fantastic people who are here."

Labor and Greens MPs and councillors gathered outside the event to express consternation at the prospect of 16,000 additional dwellings, which former Leichhardt mayor Darcy Byrne said would be "more than currently exists in the neighbouring suburbs of Balmain, Rozelle and Annandale combined".

Greens MP Jamie Parker called on the Premier and Treasurer to reveal the source of the figure.

"It's clear they've done a capacity analysis, they've looked at the yield for the site, and that's where these numbers have come from," he said.

Comment is being sought from Mr Constance.

To read the article at SMH Online, click here.