Novelists Tom Keneally and Richard Flanagan, author and speechwriter Don Watson, Australia's first female premier Carmen Lawrence, historians and a group of ex-senior public servants and diplomats are among 83 signatories to an open letter saying the money could be better spent.

Among the opponents are 24 Australians awarded the highest national honours, former Australian War Memorial director Brendon Kelson, former deputy director Michael McKernan, and five of its ex-staff. Leading architects and journalists joined them in opposing the overhaul.

Historians Mark McKenna, Stuart Macintyre, Marilyn Lake, Carolyn Holbrook and Henry Reynolds, and former Australian Human Rights Commission president Gillian Triggs, are among those who signed the letter.

It warned the expansion would offer memorial director Brendan Nelson a permanent legacy like that of none of his predecessors, and rejected the controversial planned demolition of the award-winning, 17-year-old Anzac Hall.

"The memorial should be revered, but Australia has many stories and Dr Nelson’s excessive veneration of the Anzac story denies the richness of our history," the letter said.

"Dr Nelson wants added space to display more of the big artefacts representing recent, but purportedly 'forgotten' conflicts, and to 'heal' veterans."

Recent conflicts should instead be presented in proportion to their significance, and the departments of Defence and Veterans' Affairs were responsible for veteran welfare, the letter said.

Opponents said the expansion, which has bipartisan support and would begin next year, showed the memorial received favour over other more cash-strapped national institutions.

"We have just seen over $350 million spent by the Commonwealth on the Anzac centenary and the Sir John Monash Centre in France. Should further money be spent on these extensions rather than on other needy cultural institutions or direct benefits to veterans and their families?"

A war memorial spokesman said it consulted the public about the redevelopment and engaged with architects opposed to the planned demolition of Anzac Hall.

"A decision had been made by the Australian government to support the project, as the overwhelming majority of Australians do, and it will proceed as planned," he said.

"The memorial’s mission includes leading the development of understanding of Australia’s wartime experience. A worthy part of this is enabling veterans to feel the memorial is a safe space for them to engage with and own their stories, and those of their predecessors."

The expansion would enhance the memorial and open more of the original building and collection to visitors, the spokesman said.

"The memorial’s external façade and heritage components will not be affected."

Expansion works face several hurdles including heritage approvals and the nod from the agency managing Commonwealth land in Canberra. The memorial expects to seek the heritage green light from the Environment Minister by June, and to apply for National Capital Authority approval early next year. The authority said it will consult the public in deciding on the proposal.

Editor of the Honest History website David Stephens, who circulated the letter, said it was an attempt to open discussion and apply more scrutiny to the expansion.

Richard Flanagan has previously warned against the growing militarisation of Australia's national memory and questioned the war memorial's expansion in Canberra, asking whether the project's funding would be better spent on a world-class national museum honouring 60,000 years of Indigenous history.

Historian Stuart Macintyre said there was a growing danger of over-development compromising the memorial's original design. The memorial's mission had changed in a way World War I official correspondent Charles Bean, who helped create the institution, would have rejected.

"This is a place he thought was a lasting memorial that we would visit, in which people would get fuller appreciation of what had happened, and where they would reflect, not where they were told what they should think," he said.

Walkley award-winning journalist and signatory Paul Daley, who lived in Canberra for 20 years, said public institutions preserving the nation's memory were buckling under budget cuts and efficiency dividends, while the war memorial proceeded with costly expansion plans. The National Library and National Archives needed more funding.

"It comes down to questionable priorities," he said.

Historian Carolyn Holbrook called for the reversal of expansion plans. Another historian and signatory, Mark McKenna, said the Commonwealth should instead build a National Keeping Place in the parliamentary triangle to house Aboriginal and Torres Strait Islander ancestral remains with no known community of origin. He also supported a national memorial to those who died in the frontier wars.

The government announced funding for the war memorial's expansion in November.

The memorial's spokesman said the funding of other national institutions was a matter for them and the federal government.