Buoyed by a court victory last September, residents will seek to renegotiate development plans.

A ruling in the Land and Environment Court quashed a Planning Department approval for Rose Group's plan to build 600 dwellings.

The court ruled that a deal between Rose and the NSW Government for development in exchange for a national park was a "land bribe".

A separate Coal & Allied plan to build 222 dwellings in Catherine Hill Bay was formed under a similar deal with the Government.

But a Planning Department spokesman said yesterday the Coal & Allied plan was different because the Planning Minister had not determined it.

"The department continues to be in discussions with Coal & Allied regarding [the plan] . . . in light of the court decision," the spokesman said.

Catherine Hill Bay Progress Association president Sue Whyte said residents wanted to be consulted about any new plans the developers submitted.

"They shouldn't be able to process the same applications, they should have to restart the process," Ms Whyte said.

The Rose Group confirmed it had withdrawn project applications for Catherine Hill Bay and nearby Gwandalan, following an order from the Planning Department.

A Rose Group spokesman said the company was assessing its options for the land.

Ms Whyte said residents would agree to a maximum of 200 dwellings on the Rose site and 100 dwellings on the Coal & Allied land in Catherine Hill Bay.

The town has 100 dwellings, mainly old mining cottages.

The Government refused to overturn a rezoning on the Rose site, despite residents' pleas following the court ruling.

Residents considered taking further legal action to challenge the zoning, but have cooled on the idea.