The ACT Government's Public Cemeteries Authority has identified a preferred site for Canberra's fourth cemetery between the suburb of Macarthur and the Mugga Lane tip, and an air-quality study found a gas-powered crematorium would pose no air-quality risks to residents.

The proposal will be subject, from today, to a new consultation period, after consultation last year found most Canberrans, including those living near the proposed site, supported the idea of a crematorium and cemetery being established there.

Chief Minister Jon Stanhope said there was community support for the project, and the next round of consultation would be to determine the range of services offered.

'There is general support within the community for a new cemetery in the south,'' Mr Stanhope said. ''Further investigations are now underway to explore the suitability of the proposed site on Mugga Lane and the type of services it should provide.''

Natural burials - the use of biodegradable coffins and vertical burial to save space - are expected to be offered at the new cemetery after strong community support arising from last year's consultation, and the authority said it would recommend the Government introduce the natural burials option at the existing cemeteries in Woden, Gungahlin and Hall. The site, located near the intersection of Mugga Lane and Long Gully Road, is about 500m away from Macarthur residences.

The area was previously the proposed location for a gas-fired power station, which was scuttled by community opposition and political intervention.

For more on this story, including details of previous consultation on the plan, see today's Canberra Times.