The documents also show there was anecdotal concern about how Canberra's private crematorium was being run, over a decade before an investigation was launched into lost ashes.

The cabinet files, obtained under the 10-year rule, reveal officials in the Chief Minister's Department were opposed to the construction of the new Southern Memorial Park in Tuggeranong as they thought there was no business case for a government-run crematorium.

The ACT Cemeteries Authority wanted a public crematorium built alongside a new cemetery on  Block 1610 Tuggeranong, later subdivided to be Block 1676 and 1677, to offset the cost of maintaining another cemetery and cover a growing shortfall in the perpetual care trust.

In 2006 cabinet agreed to reserve the site for one year while site studies were done.

The authority forecast a net surplus of between $40,000 and $350,000, with up to 1900 cremations a year.

But it asked for $4 million to build the facility and $1 million in each the 2008 and 2009 budget. It also wanted the land for free.

The Southern Memorial Park masterplan slated seven hectares for immediate development, and 65 hectares for future development.

However part of the site identified for expansion had also been earmarked by ACTEW for a gas-fired power station and data centre (although the site was later rejected due to Aboriginal artefacts on-site and a solar farm built instead).

An August 2007 cabinet submission said the 75 hectares of land included in the cemetery masterplan could have a land value of $190 million if subdivided and sold as industrial land.

"An alternative broadacre site that is not earmarked for future industrial or residential land-use would be more appropriate for such a large occupier of land," the Chief Minister's Department said of the cemetery.

Cabinet asked for more advice on site options and for further analysis of the perpetual care costs of the cemeteries authority.

A cabinet brief dated October 2007 said while there appeared to be a sound case for a cemetery on the south side of the city, the size of the land sought by the minister was excessive and the particular land sought by the minister had high-value alternative uses, most likely as industrial land in the future.

Further, it said: "No adequate business case has been provided as to why the ACT government should fund and operate a cemetery/crematorium as distinct to the private sector (and the option of private sector involvement has been inadequately considered".

The authority did look at three options for ownership - a publicly managed cemetery and crematorium, a public cemetery and private crematorium and a fully privatised model.

While selling the land to a private operator would have netted up to $4 million, it would not have addressed the ongoing shortfall in the perpetual care trust.

The Land Development Agency also concluded the site was the last suitable space for a cemetery on the south side.

However the Chief Minister's department said it could not support the proposal in its current form and the government should instead look at changing the law to remove the requirement to look after cemeteries indefinitely, thus addressing the perpetual care trust shortfall.

Territory and Municipal Services rejected the suggestion, saying the perpetual care requirement had been introduced by the current government and it was felt that the legislation would "establish itself as valuable over time".

Treasury also said in its cabinet submission there was no evidence the current private crematorium, Norwood Park was acting in a way that was detrimental to customers.

However Territory and Municipal Services responded with: "Anecdotal evidence suggests that the current provider does not always act in the best interest of consumers. Further the provider has relatively high charges and the absence of an alternative limits the choice for consumers."

The crematorium has been under fire for almost two months after it was revealed it lost the ashes of a baby who died in 1978.

Transport Canberra and City Services Directorate has now launched a full-blown investigation after revelations it was not an isolated case. Another four people have now come forward about lost ashes.

The government last year revived the Southern Memorial Park proposal, with Woden Cemetery expected to be fully subscribed by the end of last year. A planned extension was dumped due to the second stage of light rail.

The Gungahlin Cemetery has around 40 years of plots left, but that could shrink to 25 years if it's the only burial ground in Canberra

However the government has said the ACT's current model for cemeteries was "unsustainable in the long term" and has proposed introducing renewable tenure for plots, which means the graves would be recycled after a set time. It's also considering a  renewable tenure option for cremated ash interments.