It has roundly dismissed the project's traffic and transport assessment assumptions as "totally unacceptable" and warns that the New England Highway will not cope with more traffic.

RailCorp's and the Transport Ministry were only slightly less damning, pointing out a lack of capacity and rolling stock for more passenger rail services to Branxton, and worries that Huntlee would "further entrench" the area's high dependency on cars.

But in an extraordinary move, Planning Minister Kristina Keneally has approved the development's concept plan on condition Huntlee Holdings produces a "technical paper" that "demonstrates the justifications and assumptions" underpinning its traffic and transport analysis.

The paper must be submitted to the Planning Department before it decides on Huntlee Stages 1A and 1B.

Huntlee Holdings has argued its development can achieve a 70-30 split between motor vehicles and public transport use, and has offered to prepare the technical paper to placate agencies, including the RTA.

In a submission made in February last year and posted on the Planning Department website yesterday, the RTA condemned the suggestion and said more traffic planning and a staging of the development were needed.

The split was "completely unjustified and unrealistic" given that cars were used for about 95 per cent of all trips in the Lower Hunter's western areas.

The RTA was concerned about the highway's ability to cope if up to 400 lots at Huntlee were developed before any road network upgrades went ahead, as was planned.

"The New England Highway is currently exceeding capacity through Branxton and developing Huntlee will exacerbate the traffic capacity issues," it said.

Other approval conditions include Huntlee hiring a private bus contractor, with contract and service details to be provided with future development applications, and a detailed traffic assessment of each stage, taking in the status of the F3 link to Branxton.