There is no town water, no mains power, not even a pub. Verdant paddocks are well stocked with cattle and sheep; the trees brim with birds and koalas. Shopping is done at the solitary general store.

There aren't many rules either. There is no council to charge rates and no local police to enforce road laws. Rusty unregistered cars putter along dirt roads and residents dump rubbish at a volunteer-run tip.

Welcome to French Island, the hermits' paradise where the locals enjoy isolation and shun change, nestled in Western Port Bay just 65 kilometres from Melbourne.

Some islanders are now worried their hard-won seclusion might be lost if an ambitious Chinese tourism development goes ahead at a decrepit former prison farm that once housed low-security criminals.

"It is like stepping back in time," says Phil Bock, who wears multiple hats as a guesthouse operator, real estate agent and president of the French Island Community Association. "You can see why people want it to stay as it is."

On 222 hectares in the eastern corner of French Island sits the old McLeod Prison Farm, which opened in 1916 and was run as an Alcatraz-style penitentiary (although without the walls) until 1976.

The property, which is surrounded by national park, operated most recently as an eco-village until it was bought last year for $4 million by a Chinese-based company with plans to turn it into a major tourism operation.

As well as 80 cells, the heritage-listed property has — or rather had, most of it is in disrepair now — a commercial kitchen, airstrip, abattoir, golf course and cricket ground.

Taking The Sunday Age on a tour of the island is Bock, who handled the sale. He acknowledges that many of the 119 residents are getting nervous about what might get built at the site.

There are no concrete proposals yet, and all permit applications go straight to the state government, however that hasn't stopped the rumour mill from kicking into full gear.

Any development would dwarf the current level of mostly nature-based tourism on the island, which is limited to guesthouses and camping.

"It's not going to be a Disneyland," Bock says. "The last thing we want is another Phillip Island."

Phillip Island, although half the size of French Island, is everything its northern cousin isn't: a tourism hot spot, abounding with hotels, restaurants and people. There's the penguins and the motorcycle grand prix. The two share the ferry route but that's about it.

The only publicly available information about what might happen at the prison camp has come through a press release on the website of a China-based company called Wufu Investment Group.

Photos show state government Tourism Minister John Eren meeting the company's CEO, Ziyun Xu, apparently to discuss the plans for French Island. Locals say Ms Xu has visited the island several times.

According to the company's own English translation, the development would include accommodation, hot springs, a museum, business centre and Chinese herb garden. Aged care also appears to be a major part of the plan.

A Wufu spokesman said the proposed development "fit the trend in our business of tourism, aged care [and] health consciousness".

"We aim to encourage our seniors to travel and have a healthy and enjoyable lifestyle," he said.

"Our company is ready to invest quite some money for the development it will be good for the tourism industry and tourists who wants something different and special."

The spokesman said Wufu was yet to submit a formal proposal to the state government for approval, but "we are working closely with the government on it".

After driving the unsealed roads to the old prison in Bock's black 4WD, it's hard to see how it will all happen.

The buildings are barely standing and the gardens overgrown with blackberry bushes. An old football ground is covered with chest-high vegetation. Deer roam through pine trees planted by the prisoners. There are mosquitoes everywhere.

"They're going to have to spend a fair whack," says Bock, after a drag of his rolled cigarette, with more than a hint of understatement.

Wufu said it planned to retain the prison buildings.

"The prison is likely to be maintained as its original, so visitors will visit the prison and find out how it was like when it was in use," the spokesman said.

Transport is the major issue. There is only one potholed dirt road in and out of the property to the passenger ferry 21 kilometres away at Tankerton. And a separate barge can haul across just two cars or a truck from the mainland.

A proposal for a new car ferry between Stony Point and Cowes may include a stop at French Island, although that doesn't appear to have much support.

There is also talk of rebuilding the prison's old jetty, which has since been reduced to just a few stumps of wood, so the property has its own access.

Wufu's spokesman said the company would consider rebuilding the jetty next to the prison to make it easier for visitors to reach the site.

For now though, it's all just talk.

"The stories that go on, you don't know if there's any truth to it," says Janine Tiedgen, cellar door manager at French Island Vineyards.

The people who live on the island are an "eclectic bunch", she says. Mostly they're farmers, although Kylie Minogue is one famous former resident. Pop singers aside, it's not all country types; behind the wheel of one ute that we pass is a retired magistrate.

Self-sufficiency is the key to surviving the remoteness, locals say. Power comes through solar panels, wind turbines and generators, while water is collected via tanks. The primary school (aptly named Perserverance) has just eight students.

The weather is another factor to contend with, particularly when the brutal southwesters whip in through the heads.

Tour operator Lois Airs, a fourth-generation islander, says locals have become used to how things work on the island and "don't necessarily want it to be easier".

That's why some people are against it, she says, because French Island will change "drastically" if any newcomers decide they want those comforts.

"You're the type of person who either manages, or who stays for six months and then decides it's too hard," she says.

 – The Age