Sotiria Liangis said she would pull the pin on the next phase of the project to redevelop the Capitol Cinema site if she was forced by the ACT planning authority to construct a main entrance for the hotel to Canberra Avenue.

Mrs Liangis said the change would force her to cut a planned public cinema complex in half to provide access between Franklin Street and Canberra Avenue, which carried roughly 60,000 cars a day and had no pedestrian activity.

"I'm not going to do that. I'm sick and tired of [the planners]. Back off, there is no stage two. I'm fed up. I'm going to upgrade this and they can stick it," Mrs Liangis said.

A development application for the second stage of the hotel project was conditionally approved in July, requiring a main entrance onto Canberra Avenue and more work to generate retail and pedestrian activity around the building.

"This site is important in terms of the strong symmetry of the Manuka area and relates to the distant centreline of Telopea Park," the planning authority said in its reasons.

"The requirement for a main entry fronting the Canberra Avenue service lane will reinforce this axis, providing activation, a connection to Franklin Street, a possible formal drop-off area, and a 'front door' to Manuka from Canberra Avenue."

The National Capital Design Review Panel had also recommended exploring a pedestrian access through the building, and creating a porte cochère on Manuka Circle.

Mrs Liangis criticised the planners and community objectors for misunderstanding the building's plans and the impact the change would have on the cinema.

"Look at what we've got now. This is standing here from the 70s. They're taking my rights away, to create what? They cannot create - how do you call it? - an active Canberra Avenue because there is no room for an active Canberra Avenue," she said.

Nine representations were received on the original development application and three to the reconsideration process, which included community suggestions to provide an entry from the Canberra Avenue side.

One representation, however, said the preference for access to Canberra Avenue was based on "an outdated concept of Canberra Avenue as a Grand Boulevard, which is no longer realistic".

"None of the main buildings in Manuka, including the two churches, Endeavour House and Manuka Oval, has a major entrance fronting Manuka Circle," the representor wrote.

Mrs Liangis objected to the conditions in the notice of decision, but the objection was knocked back on Wednesday. Mrs Liangis said she would take the decision to mediation in the ACT Civil and Administrative Tribunal.

If that appeal was rejected, Mrs Liangis said she would abandon the project - which she had spent $500,000 to design - and instead upgrade the existing Capitol Cinema building, which closed in May 2020.

"Internally, I'm going to upgrade it. I'm going to really give it a good clean up, and let's see if we can operate the theatres. What can I do? I refuse to do exactly [what] the planners say, because it's impossible and it's not viable - it's not a reason," she said.

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The main entrance to the original Capitol Theatre, built on the block in 1927 and controversially demolished in 1980 before Mrs Liangis bought the redeveloped site, faced Canberra Avenue. The redeveloped site has never had a main entry to Canberra Avenue.

Plans for the redevelopment of the site were first drawn up five years ago, but a protracted battle over a London plane tree growing in a sewer but protected from removal stalled the project.

The tree was eventually removed two years ago after Liangis Investments Pty Ltd and the Conservator of Flora and Fauna reached a mediated outcome at the ACT Civil and Administrative Tribunal.

Work began on the first stage of the hotel, which was approved separately, in May 2020.

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