The cultural district should be developed in phases and could be scaled back, she said.

'We did not see the needs of today 10 years ago when we planned the project,' Mrs Chow said. 'Art and cultural development is dynamic. It is inevitable that those facilities should be developed in phases to allow enough flexibility and space for expansion and fine-tuning.'

Mrs Chow heads an advisory group on tourism and cultural facilities, one of three set up under the 67-person committee headed by Chief Secretary Rafael Hui Si-yan to consider the future of the West Kowloon development.

The others are examining museums and the financial aspects of the project.

The original plan required the 40-hectare district to feature three theatres with total seating capacity of at least 3,200, a performance venue offering more than 10,000 seats, four museums spanning a total net floor area of at least 75,000 square metres, and a 10,000 square metre arts exhibition centre.

'Different groups need different types of performing venue,' Mrs Chow said. 'The entertainment sector needs a stadium with more than 10,000 seats, but theatre groups prefer smaller venues with fewer than 1,700 seats.

'For sure, there will be changes in the core art and cultural facilities, but the changes won't be too radical. For example, there may still be a 10,000-seat stadium but its gross floor area may be diminished. There may also be more small venues.'

Along with the arts and culture facilities, Mrs Chow said restaurants and bars and residential developments would become an integral part of the project.

'Visitors [won't] go to the district just for museums or theatres. They will also look for a place to eat and relax with a glass of wine after the show,' she said.

While leaders of the city's arts and cultural sector - who have long criticised the project as too rigid and have called for a comprehensive arts policy first - are likely to welcome a more flexible approach, there was a warning yesterday that it could deter investors.

'The investment costs of hotels and shopping malls are covered by rental income,' said the former chairman of the Hong Kong Institute of Surveyors, Cheung Tat-tong. 'People-flow and the environment will be among the major factors affecting rental value.'

He said the simple solution would be to return to the traditional approach of land sales, but this might not be cost-effective. 'The government is in a dilemma.'