The seven lifestyle properties were regarded as the tip of the iceberg in which 102 houses could potentially be built in clusters among the 4300 hectares of plantation forest.
Threats that new houses could be burned down have been confirmed by Nessie Kuka of Ngai Tuwhiwhia, one of the island's five hapu.
Mrs Kuka told the
Bay of Plenty Times someone had made the threat at a hui to discuss the development plans.
"The sentiment was put on the table."
She said island residents wanted to protect their way of life and she believed the threat to burn down the houses could be taken literally. "Or you could read between the lines."
What islanders were saying was that development was not welcome on the forested side of Matakana. Land had been cleared for driveways to two of the housing lots and included land where a Maori chief was believed to be buried, she said.
"It is an old and long story."
Western Bay police area commander Inspector Clifford Paxton was asked what the police attitude was to the threat of houses being burned down. He said there were appropriate forums to have these matters heard if there were genuine issues or concerns.
"Fundamentally our communities and community members have the right to be safe and feel safe within their communities."
He suggested people contact the police if they had concerns about their safety or the safety of their property.
The developments follow an Environment Court ruling last year against a bid by forest owners to nearly double the number of rural lifestyle subdivisions. Judge Jeff Smith upheld the council's plan to protect the environmental, cultural, social and archaeological values of the forested side of the island, called the sand barrier.
However, in another planning twist that could tighten the prospects of further development, the district council had appealed the Bay of Plenty Regional Council's Coastal Environment Plan.
The district council had applied to extend the island's outstanding landscape and natural features past the coastal strip to cover the whole of the sand barrier.
Island hapu have supported the council's position while the three forest owners have opposed, with a mediation hearing due to take place on Friday.
John Page, a consultant for TKC Holdings, declined to comment on whether any lots had been sold.
Council environment consents manager Christopher Watt said a certificate of compliance was not a requirement but showed that a proposal met planning standards and was permitted.
Charlie Tawhiao, a director of TKC Holdings, said the threats were a strategy to discourage buyers of the lifestyle blocks.
As far as he knew there had been no land sales.
The Matakana Island Trust had a 27 per cent shareholding in TKC Holdings, with Te Kotukutuku Corporation having the controlling 69 per cent interest.
Mr Tawhiao said it was no surprise TKC was selling some titles to recover costs incurred in previous legal proceedings. There was a limit to how much could be sold without the total support of shareholders.
"There had always been the hope that this would not happen."
Island kaumatua Hauata Palmer said the concern of the islanders was that the new arrivals would have a different outlook, a different culture and different values. He said the Matakana Island Trust was between a rock and a hard place on the board because they could be out-voted.
"There are some real concerns about the speed they are going at. All of a sudden it has started happening."