NESTLED in the foothills of the Grampians, the ancient sandstone outcrop in south-west Victoria, Halls Gap attracts a million hikers and day-trippers each year.

Shadowed by rocky ridges and lit up by budding wildflowers, the town is a humble gateway to its visitors' final destination, offering motel and holiday house-style accommodation, caravan parks and quiet camping grounds. But as a tourism town that profits from its natural resources, Halls Gap looks likely to become one of many battlegrounds in the fight to open parks up to private developers.

Already, developers have shown interest in building high-end accommodation facilities in the ancient bushland.

And in a significant show of support for the Baillieu government's decision last month to loosen planning restrictions in national parks, councils from the Otways to the Grampians and the South Australian border have told The Sunday Age they believe developers will jump at the chance to explore investment opportunities on the state's prized Crown land.

Conceptual plans for several developments in national parks had already been discussed with councils, years ago in some cases.

It is understood the RACV was among groups to have shown an interest in the past in building in parks such as the Grampians. But an RACV representative was unavailable for comment yesterday.

Developer James Baillie, son-in-law of entrepreneur and Australian tourism ambassador Dick Smith, said his company, Baillie Lodges, was scouting potential locations for a development along the Great Ocean Road but had not yet considered Crown land.

He welcomed the decision to open parks up to nature-based tourism.

''There is little point locking parks up; better to work towards having amazing iconic experiences at every level,'' Mr Baillie said.

Corangamite Shire mayor Matt Makin - who also chairs the Great South Coast Group, a coalition of councils across Victoria's south-west - said councils had received ''significant interest'' from major development consortiums as well as individuals keen to build accommodation within the parks. Most suggestions have been for high-end accommodation - offering about 50 to 100 beds - and luxury recreational facilities such as golf courses and restaurants within the parks.

''The minister is sending a very positive and welcome message to the tourism sector,'' Mr Makin said. ''In our discussions with [developers], they very much saw the planning scheme and government policies as restrictive and prohibiting investment.''

Those obstacles were removed nearly two weeks ago when the government announced it would finally permit what other states have allowed for years: private development in national parks. It is a significant shift, or as Tourism Minister Louise Asher describes it, ''one of the greatest tourism reforms that any state government is going to see in a long time''.

The government based its decision on recommendations from the Victorian Competition and Efficiency Commission, whose inquiry last year found one way to prevent the state's $16 billion tourism industry from stagnating would be to ease planning restrictions and regulations governing land use, including in national parks.

''Nature-based tourism is huge, it's growing worldwide and Victoria needs to keep up,'' Ms Asher said. ''What this is about is getting high-value international visitors to come to our national parks and, instead of going back to a hotel in Melbourne, to stay there.''

National parks have always been afforded legal protection in a bid to preserve their conservation value. Now, as Victorian Tourism Industry Council chief Dianne Smith says, the private sector has been ''given the key to unlock the door'' to real investment.

Under the changes, investors will be encouraged to develop ''low-rise'' hotels, jetties, restaurants and other businesses designed to yield big tourism dollars. Land lease terms will be extended from a maximum of 20 years to 99 years. The number of beds at B&Bs before a permit is required will also rise, from six rooms to 10 rooms. And more activities will be allowed in farming zones, agricultural zones and Melbourne's green wedges.

The government insists projects will be subject to tight controls and approval by Environment Minister Ryan Smith, although the exact details are yet to be thrashed out. But to ensure that the most sensitive land is maintained, wildlife zones - which make up one-third of all national parks - will remain off limits.

It is not yet known what will qualify as ''appropriate and environmentally sensitive'' design. But in a move that is likely to worry conservationists, Ms Asher told The Sunday Age the rules are unlikely to be too restrictive, for fear of discouraging investors.

In some cases, developers might be urged to invest in the environment - possibly by contributing to revegetation projects or local native animal funds - as a condition of approval; in others, they could contribute to infrastructure upgrades such as walking tracks or toilet facilities. But overall, each proposal would be judged on its merits, Ms Asher said.

Environmentalists see the shift as the thin edge of the wedge, by a Liberal-National government that already has a patchy record: cattle grazing in the Alpine National Park; scrapping the state's climate change target; restrictions on wind farms. The critics argue bad planning decisions are often made: the Seal Rocks venture at Phillip Island cost taxpayers about $56 million; the Mount Buffalo Chalet has been languishing for years.

Indeed, sites such as Mount Buffalo and the Alpine National Park have already been cited by councils as development prospects. Point Nepean could also be a drawcard, with Mr Smith admitting this week it had ''enormous investment opportunities that would highlight its outstanding heritage and natural assets''.

But Victorian National Parks Association president Matt Ruchel said the government had yet to provide substantial evidence about the economic benefits of allowing private development within parks. He remains unconvinced by Ms Asher's suggestion that developers could be encouraged to contribute to the environment as a condition of approval. ''Even then, you end up with this issue of commercialisation skewing the priorities of park management,'' he said. ''We don't want to get into a situation where development is driving management objectives.''

Proponents, however, point to interstate examples of ''sensible development'' to show there's no cause for alarm. The Cradle Mountain Huts in Tasmania provide prized accommodation for walkers of the Overland Track in Lake Saint Clair National Park.

In South Australia, Grant Hunt runs the Wilpena Pound Resort in the Flinders Ranges, paying more than $100,000 for the right to be in a national park. State authorities match his fees, and money is co-invested back into the park for improvements and maintenance. Mr Hunt argues tourism can add value to Crown land ''because when you're in there every day, it's in the interest of the operator to protect and conserve''.

''The misnomer in all this is that because you've allowed development in national parks, you're going to get run over by investors. You are not,'' he said. ''The cost of doing business in national parks is horrendous. It's a highly seasonal business, you've got access issues … The barriers to being financially viable should be enough of a safeguard.''

Nonetheless, national parks are big business. Tourism Victoria figures suggest 33 million visits were made to public land managed by Parks Victoria in 2008-09. Three of the state's national parks - Port Campbell, Wilsons Promontory and the Grampians - generate a total of $481 million a year. The problem is, most international visitors who attend national parks are usually day-trippers, staying at hotels in Melbourne, rather than contributing to the regional economy.

Submissions to the Victorian Competition and Efficiency Commission inquiry show developers have been frustrated in their past attempts to create more regional accommodation. In one case, an international hotel group hoping to develop a hotel and convention centre in the Mornington Peninsula green wedge zone gave up and took its business interstate.

Back at Halls Gap, the decision to allow more park development has polarised the community, whose residents rely on tourism revenue but are wary that too much development could deter visitors in the long run.

Dot Hoffmann, a member of conservation group Friends of Grampians Gariwerd, said she feared a large resort in the park could strain local infrastructure and put the remoteness of the Grampians at risk. ''The unique thing about the Grampians is that you can walk all day and not see anybody.''

Northern Grampians Shire Council chief executive Justine Linley disagreed, saying such development would be a boon. The council had met with a developer over the past three years who wanted to build a luxury eco-resort, either in the park or in Halls Gap. Any development in the park would be environmentally sensitive while addressing the need to bring more visitors to Halls Gap, she said. ''The town is very conscious that environmental tourism is what brings people here.''