The state government says the move will address housing affordability but opponents claim it will destroy the green wedge and put further pressure on services and infrastructure in the region.

The decision will invariably mean land in the area will be subject to the growth areas infrastructure contribution (GAIC), which places a $95,000 vendor tax on each hectare of property sold.

Michael Hocking, spokesman for protest group Taxed Out, said the group would campaign against Labor in the state and federal elections on the issue.

He was hopeful that the state opposition would alter the GAIC so it applied when land was at the point of development, rather than retrospectively. Mr Hocking said the Clyde-based Oakwood Riding School, of which he is a director, could be forced to sell up if it was bisected by a planned extension of Thompsons Road.

A purchaser of the school would then face a $1million GAIC bill if it sold.

"The way this is designed there would be no place for a riding school in the area in the future. It will just be miles of housing developments with a smattering of parks and playgrounds."

Cardinia environmentalist Catherine Manning said the move would lead to road congestion and the consumption of much-needed agricultural land.

"The urban sprawl will just cause more pressure on roads and public transport, and add more cost to low-income families living in these so-called affordable estates."

Brian Welch, executive director of the Master Builders Association of Victoria, backed the government's claims that the GAIC would drive the price of housing down.

"More land means more room for builders to create affordable communities for Victorian families to live, work and play."

Casey mayor Lorraine Wreford said she had no objection to growth in the region but was disappointed it would come at the expense of prime agricultural land.