"I will not be paying them one cent," Mr Dawes said, pointing to concerns with the time it had taken Stromlo Stomping Grounds to build the container village and open it for events.

When the government announced the proposal in July last year, it was to be open for 2014 Floriade, but the project was troubled by construction delays, complaints from contractors about not being paid, and criticisms about its appearance.

Mr Dawes said "a blind man on a galloping horse" could see things had not gone as smoothly as they could have and "something had to happen".

The agency had stepped in because Stromlo had been unable to "activate" the site, including the need to spend more money to set up new vendors. Stromlo had struggled to realise the vision.

"I think they realised that they could not do anything more... We have taken back control to activate it and turn it into what it should have been," Mr Dawes said.

While vendors paid for their own container fit-outs, there were costs in connecting them to services. The agency was also concerned to protect the interests of existing vendors who had spent money on setting up outlets at the container village, and wanted to ensure their viability by lifting visitor numbers to the site.

"Obviously we want more events down there. Obviously we need to have more vitality there," Mr Dawes said. "We have actually taken back the site to complete it and create the vision and vitality and get on and start running some events."

Mr Dawes pointed to problems with the ability of contractors taken on by Stromlo Stomping Grounds to deliver the job.

Asked what responsibility the Land Development Agency should take for the problems, given it signed up Stromlo without a tender process, eschewing a tender on the grounds of urgency, Mr Dawes rejected the idea that the process had been flawed. There was a place for unsolicited bids to be handled without a tender, he said. In the Westside case, some of the Stromlo Stomping Grounds team had changed from initial expectations by the time the contract was signed, he said.

But the agency would learn lessons from the problems with Westside, he said.

The government had spent $1 million to date, including GST. Mr Dawes believed Stromlo Stomping Grounds had spent a similar amount. With construction finally complete, Stromlo Stomping Grounds was in a position to start earning some money from the project, but Mr Dawes said the group had agreed to walk away. The government was not taking on any of the contract disputes and was not paying compensation, he said.

As to whether the bureaucracy could run an effective pop-up, counter-culture venue, Mr Dawes said it was looking to take on the Stromlo events co-ordinator to organise events.

The site was described as a "damp squib" by the National Capital Authority, and a "terrible mess" by ACT Real Estate Institute head Ron Bell.

Stromlo Stomping Grounds spokesman Terry Shaw did not return calls.