Environmentalists and villagers fear a patch of land that has been flattened and cleared could be used to extend a luxury development on the edge of a country park.
About 60 per cent of the plot in Wong Chuk Yeung village, Fo Tan, which is about the size of a football pitch, is owned by the government, with the rest owned by shell companies.
The Lands Department has promised to seal off the government-owned part of the site, which had some trees, but says the landowners were free to flatten their own land.
As many as 8,000 cases of misuse land, including government land, are reported each year. The department was strongly criticised by the Audit Commission in March for failing to do more to tackle the problem.
A villager said about 10 luxury village houses had been built on a site next to the flattened slope, and they were 'already home to some foreigners'.
'Though the land used to be common farmland of the village, it was sold to some developers years ago,' he said.
A path has already been built between the two sites, cutting across a stream that indirectly feeds into the Lower Shing Mun Reservoir.