The Government will withhold a $100 million cash boost from the University of Canterbury unless it can provide financially "robust" plans for its Dovedale campus.
The university has received just $10m of the $260m that the Government announced in November it would inject into the science and engineering facilities as part of its post-earthquake recovery.
A "village of student villages" has been proposed for the Dovedale site after the College of Education relocated to the main campus, but residents are opposed.
Residents say they were told by Vice-Chancellor Rod Carr at a public meeting the university was under pressure from the Government to sell the campus on the corner of Dovedale and Solway avenues, but Tertiary Education Minister Steven Joyce denies this.
The Government did not have a "strong view" over the future use of the Dovedale campus, Joyce said.
"We're just waiting to see what they're proposing. We're open-minded."
He said the university's receipt of its $260m had conditions around "wider development plans", including Dovedale.
The next $100m would be signed over once the Government was satisfied the university's plans - to be delivered to Joyce in June - were "robust".
"We need to understand the timing, and why, and what cash pressures it puts them under.
"We want to know what else they're doing and making sure that they are contributing as much as they can themselves into the rebuild."
One option was to sell part of Dovedale, but the university wanted to keep it for future development.
"Their preference is to shift the education faculty on to the main campus and to use Dovedale for more student accommodation," Joyce said.
The university has a 99-year lease of the Crown-owned Dovedale campus, but Joyce said he was "open to transferring" it to the university completely as long as it was used for educational purposes.
A university spokesman said it was "preparing a business case for the transfer of title of the Dovedale campus", which was "ideally suited" to ongoing educational activities including student accommodation.
"We are working collaboratively with the Government and consulting regularly with the community and neighbours on the future use of the campus," he said.
Its "immediate priority" was student accommodation", and the Sonada Hall had been on the Dovedale campus for 20 years.
"The long-term future of the Dovedale campus is most likely as a village of student villages plus teaching, research and other support activities," the spokesman said.
Ilam Upper Riccarton Residents Association spokeswoman Jane Tyler-Gordon said residents were concerned about how the Dovedale site would be developed and were "up in arms" when the university revealed it had plans for a 250-student accommodation hall.
"What people don't want to see is a student village with a pub in the middle and loud music," she said.
Losing the site would be sad for the university, Tyler-Gordon said.
Riccarton-Wigram Community Board chairman Mike Mora said he would be "very, very surprised" if the university got rid of Dovedale.
"Once it's sold, it's gone," he said.
"There should be some strings attached, but I don't think selling land to meet the Government's wishes is a good thing."
- The Press