State Attorney-General Brian Wightman said that chasing the Walker Corporation  for debts relating to a failed Southern development could cost more than what was owed.

The debt stems from the planning assessment undertaken on the company's canned $300 million Lauderdale Quay Project during the Lennon government. 

Walker repaid $135,000 in 2008 but has not budged on the balance since.

``Negotiations have been protracted and both parties have now concluded that the costs of the assessment were not recoverable from Walker Corporation,'' Mr Wightman said.

``To avoid the costs of further protracted action, most likely in the courts, I have decided to settle the matter on the basis . . . the outstanding amount will be waived.''

Yesterday he signed a deed of settlement with Walker relating to the Ralphs Bay canal-style project. 

The campaign against what was a controversial development at the time helped launch the political career of Greens Denison MHA Cassy O'Connor.

Ms O'Connor, now a member of the minority government, said that she was outraged with Walker not Mr Wightman for the decision.

She said that Ralphs Bay residents suffered years of stress because of the proposed development.

 ``For all that pain and stress Walker Corporation is walking away paying just $135,000,'' she said. 

``They actually don't care about their reputation in Tasmania.'' 

Her party is calling for laws to be changed so assessment costs are fully recoverable from developers.

The opposition called for more transparency on the government's settlement with Walker Corporation which it said may set a precedent for future failed developments. 

``This looks like a $700,000 government stuff-up to me,'' Liberal MLC Vanessa Goodwin said. 

Walker Corporation did not return several calls. 

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