The university will be allowed to develop office space for businesses not associated with the university under the proposal, and up to 3300 homes, over and above student accommodation.

The National Capital Authority has flagged concerns about the impact on the Belconnen town centre and urged the ACT government to consider capping the amount of office space allowed. But in its response, the government said the University of Canberra is not a competitor to the Belconnen centre but an extension of it.

At the moment the university's zoning only allows offices if they're for not-for-profit groups or education-related. The change will allow office space to be built for businesses, other organisations and government departments, with a limit of 2000 square metres for any one group, or larger "where it can be demonstrated that the development is not of a scale which will compete unduly with the Belconnen town centre".

The proposal envisaged "health, cultural and sporting facilities and industry collaborations that support the ongoing financial and educational performance of the university".

"Businesses, such as a veterinary hospital, dental practice and research commercialisation facilities will be able to be co-located at the campus," it said.

The National Capital Authority suggested an overall limit on office space. "The NCA is not confident that the cumulative impacts of ths type of commercial development will appropriately protect the primacy of the Belconnen town centre," it told the government. "While individual developments are limited to a maximum gross floor areas of 2000m2, there are no further restrictions on the total [gross floor area] of non-university-related commercial development."

The changes allow other developments, including a hotel, service station, and club. A supermarket on campus would be limited to 1000 square metres, and shops would be limited to a floor area of 200 square metres, with a combined maximum of 4000 square metres, under the Territory Plan change.

But vice chancellor Professor Stephen Parker said the university had no immediate plans for a supermarket, other than a small supermarket already open in a student lodge. "

He also allayed fears of big office developments, saying "the only office space would be associated with other developments such as an innovation park. We would not develop office space on its own to rent out because there would be no academic or research linkages."

The plan changes were "very important to the long-term development and sustainability of the University as we enter an era of market forces in higher education," he said. "Many universities have other flows of revenue, from long-standing endowment funds bequeathed by alumni, or property arrangements such as ANU's City West. The aim is to diversify our sources of revenue so that we are less reliant on the Federal Government and can withstand fluctuations in the student market." The university launched a website about its plans on Friday.

ACT Planning Minister Mick Gentleman said the changes would ensure the university's viability by giving it new income streams.

"Our universities are operating in a tough global economic environment, made more worrying by the looming pressures from promised federal government reforms and cuts to higher education," he told the ACT Assembly.

The university economy was critical for the future of the city and for the University of Canberra to continue growing and remain competitive, it needed to be able to pursue commercial opportunities on campus - not only in education but broader, he said.

The changes would allow the university to fully use its land and generate economic activity in the city. It also meant the university would require less support from the ACT Government, he said.

The Territory Plan plan change applies to the block bounded by Haydon Drive, Ginninderra Drive, Aikman Drive and College Street. Comments are open till June 29.