The authority's report from late 2015 has not curbed Liberal Senator Zed Seselja's push for suburban development across the Murrumbidgee River.

Senator Seselja said the report had recommended zoning changes to enable the ACT governmentto develop the area and address the issues of affordable housing.

"The current lack of both housing and facilities in Canberra's outer suburbs is making it hard and unappealing for young Canberrans to enter the property market, particularly in Tuggeranong," he said.

"The numbers detailed in the report show a residential development in west Tuggeranong could result in a 20 per cent increase in the population of Tuggeranong.

"This is a big win for Canberra, providing significant opportunities for affordable housing and rejuvenation of the local town centre."

The 100-page report, prepared in response to Senator Seselja galvanising federal action in 2014, has been released after a freedom of information request.

It significantly scales back the area that can be developed. While work in the 1970s envisaged as many as 50,000 people living west of the river, the authority said just 730 hectares of the 3800 hectare area were potentially suitable. The space could fit 5585 homes, for 14,130 people - well under the combined population of Wanniassa, Monash and Gowrie.

Squeezing more people into each home, 3.05 people per dwelling instead of 2.53 people, and reducing block size could push the population to 20,000, the authority found, but that could be reduced again by a 400 metre river buffer, a bushfire protection zone and infrastructure and service corridors.

In 2003, the ACT government commissioned Maunsell to investigate future suburban areas. That report envisaged as many as 36,800 homes across 2280 hectares in West Murrumbidgee, but nevertheless ranked the area 10th of the 11 areas it investigated. West Murrumbidgee was one of the most expensive to develop, costing $322 million, or $18,400 per block.

Only Kowen, well east of the airport, was ranked lower, with northeast Belconnen and Gungahlin ranking highest in the Maunsell report, costing $10,600 and $14,100 per block to develop, and fitting 16,000 people and 78,000 people respectively.

The National Capital Authority said Actew Water (now Icon) had a "major concern" about the impact of a West Murrumbidgee suburb on water quality, risking its ability to meet drinking water guidelines and possibly forcing a new water treatment plant. A new gas main would also have to be drilled under the Murrumbidgee River.

The authority said the natural environment, in particular, limited development. Seventy per cent was in native vegetation, with some of the largest and best connected patches of endangered boxgum woodland in the country. It was an important wildlife corridor, a stronghold for woodland birds, and home to threatened fish. It was home to largest remaining population of vulnerable pink-tailed worm lizard, and included the protected Lanyon Bowl and conservation area.

The authority concluded that while it was "not aware of any matter that would entirely prevent urban development", the impact on the river corridor "remains a concern from ecological and water quality perspectives", and the development would be expensive, especially in the cost of bridges across the river.

The authority's report said in the 1970s, the proposal was to house 40,000 people in West Murrumbidgee, but the number was boosted to 50,000 to make it economically viable, given the cost of bridges. But interest waned as Canberra's growth slowed, and in 1984 the federal government decided the corridor would not be developed.

The ACT government plans 45,000 more homes (on 2011 numbers) by 2030, but was already developing up to 48,000 in Molonglo and Gungahlin (Gungahlin has since been scaled back), plus up to 11,500 in West Belconnen.

Last year, the federal government handed control of the West Tuggeranong area to the ACT, leaving any decision to develop suburbs in the hands of the ACT government, which is opposed.

Separately, the ACT government proposed then scrapped, the idea of suburban development between the town centre and the river.