Developers are raising concerns that new planning legislation will hit Nama, the soured loans bank being set up by the Government.

Two developers, who contacted the Sunday Tribune, believe the new laws will restrict development on land whose loans have been transferred to Nama, increasing the likelihood that they cannot be developed for many years and that the owners will be forced into liquidation, leaving Nama holding sites that are effectively mothballed.

Both developers, one of whom is a large industry player, said that local authorities are already taking the new legislation into account when making planning decisions.

Under the new legislation "the location, quantum, and phasing of proposed development must be shown as well as growth scenarios, details of transport plans, and retail development, and proposals for development in rural areas".

Developers say this means that land that has already been zoned will receive priority in terms of development, even if other currently unzoned land is more suitable for development.

This newspaper reported earlier this month that loans worth billions of euro were given by the banks on sites that cannot be developed because of new EU water regulations. Those loans will end up in Nama. In a recent document circulated to Fingal county councillors, which was obtained by the Sunday Tribune last week, its county manager David O'Connor said that "until such time as these new/upgraded plants are operational there will be severe restrictions on development in the relevant areas".

Surface water and groundwater would "need to be considered when making decisions on zoning and development of all lands", it said.