Mr Trotter addressed the letter to member for Wannon Dan Tehan and took issue with the $8 million committed to the "risky proposal" and "private tourism venture" located on wetlands.

"With the current change in flood levels and the extensive damage and costs incurred as a result of flooding in NSW and QLD, one would have to question the advisability of committing public funding to a project that may face periods of time when it cannot operate due to inundation," Mr Trotter wrote.

"One would have to question whether such a facility would be insurable. There is plenty of photographic evidence of the entire flood plain of this estuary being under water.

"If the developer wishes to proceed with the development they should do so risking their own investment. Public funding should not be allocated to this risky proposal."

Montarosa director Gavin Ronan said Mr Trotter's claims were substantially "incorrect".

"A number of the claims in Mr Trotter's letter are simply incorrect and do not withstand scrutiny," he said.

"Public money is not being used to fund the Princetown Eco Stay development.

"Public funding is being used entirely for vital public infrastructure upgrades that will benefit everyone. These upgrades include the replacement of the 76-year-old Old Coach Road Bridge, the creation of part of the 12 Apostles Trail and vital safety upgrades to the Great Ocean Road and Old Coach Road.

"These upgrades to public infrastructure, aside from delivering significant public benefits, will also enable the creation of 75 jobs and contribute $26 million to the economy during construction of the Princetown Eco Stay project, and 78 full-time equivalent jobs and an annual economic uplift of $25 million once complete."

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Member for Wannon Dan Tehan said he appreciated Mr Trotter's letter but all grant processes had been completed collaboratively.

"I always appreciate feedback and letters like that from all constituents and Neil in particular has been someone who's served on Corangamite Shire Council," he said.

"(But) all public money that's been expended has been done through programs and those programs have required Commonwealth, state and local government approval.

"Every planning application has been done through the proper processes. All the grant processes have been done according to the guidelines."

The project recently received further funding through a share of a $15.68 million federal-state cash injection into projects across the Shipwreck Coast.

Mr Ronan said the latest cash grant from the Geelong City Deal's Private Sector Business Enablement Fund would be used to the community and surrounding area's benefit.

"Montarosa has already commenced public infrastructure upgrades with the completion of a three-phase power extension from some 10km away, providing an improved power service to adjacent farms, the Princetown township and recreation reserve," he said.

"Construction on public infrastructure upgrades is expected to commence in coming months, with stakeholders and the community to be well informed before works commence and throughout construction. "

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