Mr Stewart is urging the federal and state governments to work collaboratively to secure the funding for the campus proposal and generate jobs for the North.

Mr Stewart, who is behind the Silos Hotel development where work is expected to begin this month, said the university project was vital to bringing more construction work and in turn greater investment to the city and the North.

"I think it's really important both the state and the Commonwealth members of parliament get their act together, in my view, and go to Infrastructure Australia with the university and say, 'we want to get the funds locked away'," Mr Stewart said.

"I understand the university want to do it but I'm not sure if there's a cohesive proposition from Bass, both federally and state, to go with the uni - we're all behind you."

Mr Stewart said such a development would probably secure a Northern university campus forever, as well as help revitalise the city.

Mr Stewart's call comes as a group under the name Launceston Concerned Citizens has written an open letter to Prime Minister Malcolm Turnbull and published it on its website, raising concerns about the proposal and putting forward another - for a new Northern university in the future.

The letter from the residents' group - signed by former UTAS professor Dr Alex Thomson and two former Launceston City Council aldermen, Ian Routley and Basil Fitch - states the group's concerns with the gift of the council land, describing it as a flood risk and the "dumbing down" of the university's Northern campus with the offering of associate degrees.

The group has proposed the establishment of an advisory group to investigate the implications of dismantling the amalgamated campuses.

It also proposes the establishment in due course of an independent body to consider a new university in the North.