When the NSW government first proposed to transfer the Powerhouse Museum from Ultimo on the fringe of Darling Harbour to Parramatta in western Sydney it was greeted with widespread approval.

To many citizens it made perfect sense to elevate public culture in the arts-starved western suburbs. Another point of attraction was the proposed funding arrangement: the sale of the Powerhouse site would pay for the museum’s relocation i.e. there would be no burden on taxpayers.

The Powerhouse has a celebrated 136-year history dating from the Sydney International Exhibition in 1878. The current Ultimo headquarters was officially opened in 1893 when it was known as the Technological Museum. Its priceless collection contains a Catalina aircraft and a Boulton and Watt steam engine which attracts visitors from all around the world.

In the first instance, the relocation project received bipartisan support in State Parliament and from the official (government-funded) arts community. Ministers, arts bureaucrats and the ever-present army of lobbyists and consultants proclaimed the Powerhouse’s closure and its transfer to Parramatta was a “perfect synergy”.

According well-informed opinion the establishment of Sydney’s second arts capital 23 kilometres west of the Central Business District (CBD) was a “done deal”.

In recent days, however, it has become painfully obvious that the proposal has hit a brick wall. A groundswell of opposition has stalled the plan and many now doubt that it will ever be executed.

First and foremost, the project was incorrectly costed and as a result, in the cold light of day, it has simply become unaffordable even for Australia’s No.1 state economy with its glistening Triple-A rating.

Originally, the sale of the Ultimo site was forecast to raise up to $250 million with the new Parramatta museum costed at $450 million, creating a shortfall of around $200 million which would be picked up by the NSW government.

However, when an all-party parliamentary committee took evidence from stakeholders earlier this month, the “official” figures were challenged and the secrecy surrounding the project started to fall apart.

It now seems that the sale of Ultimo – at the mercy of a cartel of major developers – may raise only $130 million and the final cost of the new gallery on the banks of the Parramatta River may be as high as $1 billion.

When the seven-member Upper House committee asked for written public submissions on the performance and effectiveness of the government’s arts policy it was overwhelmed by 169 individual commentaries, many of them focused on the ill-conceived Powerhouse project.

Trevor Kennedy, a former CEO of Consolidated Press, Bulletin editor and Australian Financial Review journalist, told MPs that the closure and relocation of the Powerhouse should be halted and re-examined.

As a life fellow, life member, former trustee, fund-raiser and donor to the Powerhouse, Kennedy said that the decision was “outrageous” and described it as “a thought bubble”.

“Nobody wants to deny western Sydney the opportunities to have greater and easier access to cultural events and artefacts but this proposed solution is – in one word – silly,” Kennedy said.

“It is totally irrational. Let’s fix it before it’s too late.”

Acclaimed arts administrator Leo Schofield, another former Powerhouse trustee, offered “a dozen cogent reasons as to why this proposal is not only misguided but also absurdly costly, in terms of both money and loss of prestige”.

Schofield urged the Baird government to “re-consider” its plan and to involve the knowledge of experts with proven museum experience rather than relying on urban planners and property developers.

Well-regarded arts curator, writer and educator Dr Grace Cochrane said that “it was hard to believe that any government would want to be remembered as the one responsible for destroying so many things we all believe to be important. And yet this is what the current NSW government is doing.”

The most damaging submission came from Powerhouse heavyweight Dr Nick Pappas, a former president of the museum’s trustees, who said the proposed relocation was “a flawed plan”.

“Museums are not departmental offices that can be abruptly shifted holus bolus to new localities for reasons of efficiency or savings, or even for reasons more mischievous,” Pappas said.

MPs heard devastating evidence about siting the new museum on the Parramatta River’s flood plain with Dr Lindsay Sharp, the Powerhouse’s founding director, saying that the “unforeseen” peril was flood mitigation.

“Around the world most museums are moving their collections away from flood plains, like in Paris,” he said.

Lionel Glendenning, architect of the Powerhouse, the National Gallery of Australia and the High Court of Australia, testified: “The [Parramatta] site is on a flood plain. A flood plain has been there for thousands of years. You cannot put basements in the building. If you put a basement in there it would be like building a concrete boat. They would have to tie the damn thing down.

“The Louvre in Paris – this mega, giant airport of a museum – flooded. We have all walked along the Left Bank and looked down at the Seine. Yet this is what is proposed for this site. It does not make a lot of sense.”

The unmentioned strategy behind the Powerhouse transfer to western Sydney is purely political. The NSW Liberal Party is attempting to break out of its traditional electoral ghettoes on the North Shore, the Northern Beaches and the Eastern Suburbs and raise the party’s blue flag in the State’s major population and economic growth area, Western Sydney, home of the so-called “Howard battlers”.

But evidence given to the parliamentary committee has been so universally hostile that the over-paid shiney-pants at Treasury and the Premier and Cabinet Department are running for cover. Those who were devoted supporters of the property developers’ rort only months ago are now looking for ways to avoid being caught in the fall-out. Can a Baird government announcement of a “rescheduling” be far away?