The council's Shellharbour Enterprises director Matt Youell said council staff were advised by a member of the public of a rumour that was circulating among the Aboriginal community that human remains had been excavated during construction of the Shell Cove harbour.

"Immediate investigations were undertaken by staff with Australand and Coastwide Civil," Mr Youell said.

"There was no evidence of any human remains being either uncovered or excavated on site during construction works."

Mr Youell said in the event of finding any human remains, the law required that police be notified immediately and all operations and activities at the site cease immediately.

"The development consent for the harbour construction, the permit and consent issued by the Office of Environment and Heritage reinforce these responses," he said.

"Coastwide Civil is fully cognisant and compliant with these."

In 2005 three traditional owners, Aaron Broad Henry, Steven Henry and Roy Kennedy lost a court case challenging the Shell Cove marina after setting up protest encampments on South Shellharbour Beach and, later, Bass Point.

At the time their legal advocate Alan Oshlack said it was "totally inappropriate that a development goes ahead on the site of a massacre". However, Justice Angus Talbot dismissed the case "in all respects".

In 2007 a crime scene was established at Shellharbour Swamp after the discovery of bones, but the bone fragments found were not human and belonged to an animal, most likely a sheep.