The State Government back-flipped on its commitment to cap developer infrastructure levy contributions at $20,000.

It was announced yesterday that councils, including Liverpool Council will now receive $30,000 per block in section 94 contributions, which will be the new cap.

Liverpool Councils was one of the councils that campaigned to have the cap removed after it was announced several months ago.

The government introduced the cap in the levy as a way of stimulating residential housing development, in an attempt to alleviate the state's housing shortage.

Acting general manager Farooq Portelli argued that if the cap is adopted, the council will not be able to provide the infrastructure to the area's green fields sites which are to be developed in coming years.

He said that if the cap was maintained, the council would be forced to increase rates to pay for the necessary facilities, which it did not want to do.

Mr Potelli also said that the cap wouldn't have the affect that the government wanted anyway, because developers would not rush into the industry.

He said that because the council wouldn't be able to afford to provide the developers would be forced to provide it and that would scare them off.

The council launched a strong publicity campaign and lobbied the State Government against the move, with the Mayor Wendy Waller and Mr Portelli meeting with government officials.

Yesterday, Mr Portelli said that the council has worked hard to represent and advocate on behalf of residents.

``We have held several meetings with the Minister [NSW Planning Minister Tony Kelly] and have been instrumental in proposing real alternatives for his consideration to resolve the impasse,'' Mr Portelli said.

He said that he is proud that the council played a significant role in having the cap lifted.

The council had planned to receive $36,000 per block in its planning for the new release sites in the south west growth centre and areas including Edmondson Park.