Two major Matakana Island landowners have been accused of being "contradictory" by seeking more liberal subdivision controls than exist on the mainland.

Tauranga lawyer Paul Cooney was opening the Western Bay District Council's defence of its planning vision for the island.

The council has been challenged by the three major landowners of the forested side of Matakana. They are seeking greater flexibility around rules that focus on cultural and environmental safeguards to protect the island's "unique way of life".

Mr Cooney told the Environment Court that it seemed somewhat contradictory for the owners to acknowledge the special characteristics of the island, but to then seek more liberal subdivision controls for the forested side than existed on the mainland.

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Developer Carrus Corp sought to remove the cap of one lot per 40 hectares in order to allow up to 200 houses to be built in the forests, nearly double what was permitted by council planning rules.

Changes sought by TKC Holdings included making exceeding the cap a "non-complying" activity rather than prohibited outright. It also wanted a management plan-styled approach instead of "prescriptive standards".

Mr Cooney, who set the tone for his opening by reciting the WB Yeats poem The Isle of Innisfree, said the island was a special place, defined by the rugged wilderness of the low-lying forestry barrier with its outstanding, unspoiled visual qualities, significant ecological values and the cultural relationship that the people of Matakana had with the entire island.

He said the challenge to the density cap brought into focus the question of whether the forested side of Matakana was an outstanding natural feature and landscape. The Bay of Plenty Regional Council's coastal environment plan ranked it as significant and a subsequent report elevated this to "outstanding".

However, Carrus and TKC said the "outstanding" ranking should be confined to the island's coastal margins.

Mr Cooney said a decision by the court on whether the whole of the forested barrier was an outstanding natural feature was important to the proceedings.

Most of the key planning restraints were being challenged to make development more permissive, he said. The appeal hearing continues.