A secret agreement between two Barangaroo developers and the government gave the companies a swathe of extra floor space while providing them compensation if the project didn't get approved.
A NSW parliamentary inquiry into potential bias in the multibillion-dollar Sydney harbourside project heard on Friday the deed involving Lendlease and Crown granted them a "development bonus" of 8000 sq m at Barangaroo south.
The formerly confidential 2019 agreement, which came after the government lost a Supreme Court case, followed a dispute over valuable "sight lines" from the project to the Sydney Opera House and Harbour Bridge.
The deal also included a clause that the state would pay the developers $80 million if they walked away or planning approval wasn't granted.
Both developers were given extra rights over swathes of waterfront property and street areas within Barangaroo.
Grocon, which won the tender for the adjacent Barangaroo central project but went into administration in 2019, said the extra floor space alone was worth $300 million to the developers.
Tom Mackellar, the managing director of Lendlease's development business in Australia, repeatedly told the inquiry he didn't know the value of the additional space.
He said the 2019 agreement resolved years of disputes over views, which stretched back to the original plans for Barangaroo for a smaller, low-rise development in the central area.
"We have made payments for the site - in order to progress with the site we needed to sell apartments, but we can't make reparation to buyers of those apartments what their views might be ... if we don't have certainty (on sight lines)," Mr Mackellar said.
But Grocon chief executive Daniel Grollo accused the government of being "driven by greed" and guilty of unconscionable conduct in selling the same sight lines twice then refusing to give his company certainty over views from Barangaroo central.
"They adopted unreasonable positions, caused extensive delay, were not transparent," he said.
"And then when they settled with Crown and Lendlease, they kept the terms secret and deliberately forced Grocon out of the central Barangaroo development."
Mr Grollo said his company was repeatedly told it would get a notice of sight lines - which was essential for selling parts of the development - but this was delayed until 2019.
By then, Grocon was in financial trouble due to delays in the project. It eventually went into voluntary administration.
The day after the developer left the project, the sight line notice was granted to its junior partner, Aqualand, which took over the Barangaroo central component, the inquiry heard.
"Looking back on this, at some point around early 2019 the decision was made that Grocon was expendable," Mr Grollo said.
The parliamentary committee is looking into actual or perceived biases during negotiations between the government, builder Lendlease and casino operator Crown.
It is expected to hear later on Friday from former NSW premier Mike Baird and senior government officials.
The inquiry will attempt to find out why the government's Barangaroo Delivery Authority appeared to have sold Sydney Harbour sight lines twice, to both Lendlease-Crown and Grocon.
It is also looking into the "unsolicited proposal" process, which Crown initiated to build its controversial casino and hotel at Barangaroo.
Independent Sydney MP Alex Greenwich told an earlier hearing that disputes over and modifications of the plans cost the city a world-class harbour precinct, and Barangaroo had been an example of the "wild west of planning in NSW".