The thought of losing their downtown car park – a long-time target of developers – and gaining a 740-space car park underneath Manly Oval at a cost of $35 million has locals in a lather and split Manly Council along party lines.

Virtually all of Manly's precinct committees are opposing the project, which is part of council's Manly 2015 plan. It's being championed by Manly's Liberal mayor Jean Hay as a way to rejuvenate the area because it would enable the 1970s above-ground car park in the the centre of Manly to be sold for as much as $16 million.

The main objection is the financial risk that the project entails, North Harbour Precinct chairman Terry le Roux says. The project would involve council taking $35 million in borrowings over the next 50 years.

Experts say it will make losses for at least the first 12 years because the demand will not be there, raising questions about why there is such haste. The current car park, which makes a profit, has 400 spaces.

And while the capital expenditure has received sign-off from the Department of Local Government, it was on lukewarm terms.

"While primary concerns have been addressed, I note the complexity and risks associated with the project, the department's director-general, Ross Woodward, wrote last month.

While the capital expenditure criteria of his department had been "broadly met", Mr Woodward said there remained issues, notably questions about the viability of the project, including the assumptions of future growth and the price that could be achieved for the sale of the old car park.

Mr Woodward also queried whether the council could achieve long-term financing at 5 per cent and whether it had sufficiently budgeted for unforeseen events.

The project is being supported by Manly Rugby Club president David Begg, whose club uses the oval as its home ground. However he said while he was generally in favour, there were many views within the club. He wanted to be sure the benefits would outweigh the disruption that the club will face while construction takes place.

Mr Begg is also well connected in the Liberal Party. He is close friends with Cr Hay and Premier Mike Baird who are patrons of the club.

As his website boasts, "he's been a key member of the NSW Liberal Party since 1989". He served on the NSW Liberal Party's State Executive and in July his lobbying firm, Premier State, disclosed a $100,000 donation to the Liberals' state office, seven months after it was made.

But Mr Begg firmly rejects any suggestion that his support is linked to his day job as principal of Premier State lobbyists whose clients include the Mounties, which own Manly Bowling Club.

"I haven't spoke to the Mounties about this issue," he said. "It might be of long-term value, but in the short term it would hurt them as the football club puts thousands through the bar each week after the games."

Mounties is the major sponsor of Manly Rugby club.

So far Mr Baird has kept out of this particular stoush but has called on the council to consider the wishes of residents.

Some councillors think the project simply lacks vision. "It's really just for developers to meet their demand for commercial and residential space in the heart of Manly," Greens councillor Cathy Griffin said.

"The vision should be about the civic centre for Manly. Once that has been better articulated then we can talk about whether we need a car park under the oval."

Independent councillor Candy Bingham said she could not understand why the Liberals on council were so determined to push through this project and is organising a protest march on October 12.