The City of Sydney will contribute up to $60,000 towards community plans for a "People's Summit" on the Bays Precinct amid concern about the state government's bid to open up prime harbourside public land to developers.

Liberal Edward Mandla was the only Councillor to oppose the idea, which he said was an example of "small-minded thinking".

"It's better handled by people who know what they're doing," Cr Mandla said.