NSW government hopes of transforming a racecourse into 25,000 homes in western Sydney may have been dashed after a state parliament inquiry was told Australian Turf Club members would reject the sale.

During a fiery hearing on Friday in which Racing NSW boss Peter V’landys clashed with upper house MP Mark Latham, and ATC boss Peter McGauran claimed a “high Indian population” in the area had led to reduced crowd numbers, two ATC board members said club members were against the sale.