NSW Planning Minister Brad Hazzard said on Tuesday rezoning rural land to make way for 2000 homes south of Queanbeyan would not restrict the airport's future growth.

The airport could maintain its curfew-free operation, its potential for a 24-hour, seven-day freight operation and an increase in flight numbers.

But the announcement has provoked anger in the airlines industry and federal government because of noise complaints that could restrict aircraft movements.

Federal Transport Minister Anthony Albanese said Canberra's curfew-free status provided opportunities to expand into freight, particularly with fresh produce going to the Asian region, that could not go out of Sydney because of its curfew.

Mr Albanese said Mr Hazzard had no authority to protect an airport's curfew.

''It's like saying that anyone who's moved into a flight path under Sydney Airport since the 1920s, has no right to complain about aircraft noise. I'll give you the big news tip - people do.''

Canberra Airport managing director Stephen Byron seized on comments from Queanbeyan mayor Tim Overall that council's long-standing policy was to support a curfew.

''The whole bedrock of this decision was no curfew. Queanbeyan Council on day one is arguing for a curfew.

''The bedrock is on shifting sands, the whole basis for no restraint on the airport is unravelling before our eyes.''

On radio Mr Overall had said: ''I'd have to say it is already on the record going back quite a few years now, that council does not support a 24-hour operation at the airport and supports a curfew. But that has nothing to do with South Tralee.''

Later Mr Overall said his comments related to the previous council's response to the airport's 2008 preliminary draft master plan for an international airport, and its opposition to a 24-hour operation and curfew.

''The current council hasn't considered it, nor is it on the agenda. I don't think I will make any more comment on it.''

The rezoning from rural to residential follows more than a decade of furious debate and planning inquiries. Queanbeyan Council will now preside over the planning proposals which include noise-insulated homes, a school, swimming pool, community facilities and playing fields.

Developer Village Building Company also has an option, subject to planning approval, to develop Environa, another parcel of land near Tralee that sits on the border near Hume.

Managing director Bob Winnel said the company was not looking at it at this stage and was focused on Tralee.

Mr Byron said it could take the staged development to 5500-7000 homes, but Mr Winnel said: ''We really don't want to get into it, if anything comes up we will debate it at that time.''

The two rival developers are locked in a related dispute following the airport's attempt to buy a portion of the Tralee estate, to exercise control over future development.

The matter is listed for hearing in the Family Court early next year.

Federal shadow treasurer Joe Hockey joined the debate on Tuesday saying it ''does seem odd the state government would approve additional residential housing around Canberra Airport, when it says that should be the second airport for Sydney''.

Mr Hockey, who has previously described NSW Premier Barry O'Farrell's position on Sydney Airport as ''absurd'', said: 'The Premier is entitled to his views but we should really be honest and deal with this issue in the Sydney Basin.

''Canberra Airport was never a viable option as Sydney's second airport and it certainly isn't now.''

Mr Hockey is one of a group of federal Coalition MPs trying to persuade Mr O'Farrell to drop his opposition to a second airport in the Sydney Basin.

They are desperate to avoid what some describe as the ''Armageddon scenario'' spelt out in a joint federal/state planning report released earlier this year.

That report said if immediate action was not taken to start planning for a second airport there would be traffic gridlock around Sydney Airport, air travel delays, lost jobs and economic growth and a return to the concentration of aircraft noise that plagued Sydney in the 1990s.

The report said there were only two options for a second airport. The best remained the Badgerys Creek site, near Liverpool, bought by the Hawke government almost three decades ago but now ruled out by both sides of politics. The second best was at Wilton, south-west of Campbelltown, where the Gillard government has begun scoping studies, despite the NSW government's trenchant opposition.

Federal Opposition Leader Tony Abbott has not ruled out support for a second Sydney Airport.

The Canberra Airport is awaiting planning documents and reasons for the decision before making its next move, and will continue its vigorous opposition at every opportunity.

with Lenore Taylor and Josephine Tovey