A flyer has started appearing in letterboxes in Waterloo and Alexandria in the past couple of weeks, attempting to prod residents to lobby in favour of a new rail station.

The government faces a choice in the next month about where it wants to build a new station as part of the "metro" line planned to run between Chatswood and Sydenham.

The two options are at Sydney University and at Waterloo. The Sydney University option is understood to be favoured by some Transport for NSW bureaucrats, due to the tens of thousands of guaranteed passengers a day.

But the Waterloo option is being pushed by the property development arm of the state government, UrbanGrowth NSW, as a catalyst for major apartment projects in the area. The Waterloo option would also trigger the destruction, but possible replacement, of about 2000 housing commission apartments.

The trouble for supporters of the Waterloo option, however, is that while Sydney University has been a vocal advocate of its station, UrbanGrowth NSW is prevented  from lobbying publicly for a decision from its own government.

It appears that someone, however, has decided to take up the lobbying on UrbanGrowth's behalf.

Two leaflets have recently started appearing in letterboxes in the area encouraging residents to write form letters to the NSW government.

The letters are anonymous, and link to an unregistered website, which adopts the plastic jargon of the urban spruiker.

"Premier, the selection of a Waterloo route option will reward New South Wales inter-generationally," the form letter says.

"It will deliver lasting value and enable an entirely reconfigured district," it says.

Colin Schroeder, a convenor of the advocacy group EcoTransit and an Alexandria resident, was immediately suspicious.

"I was surprised to receive it in my letter box, without anything on it to say who could be doing this," Mr Schroeder said.

Mr Schroeder's suspicions immediately centred on UrbanGrowth.

But a spokeswoman for UrbanGrowth denied any knowledge of the fliers. "UrbanGrowth NSW has been made aware of the flyers but does not know who is distributing them," the spokeswoman said.

The choice of a Waterloo or a Sydney University station is proving unusually difficult. It is understood the Planning Minister, Rob Stokes, is backing the push for the Waterloo station in Cabinet deliberations. The position of the Transport Minister, Andrew Constance, is unknown.

The Sydney Metro city and south-west alignment. Photo: Remi Bianchi

The Lord Mayor, Clover Moore, is one who thinks that a station at Waterloo can be added to the existing airport rail line, allowing the new line to be directed to Sydney University.

"There's a strong case for a new station in both locations," Cr Moore said.

"Given the existing demand, a new metro station is best placed at Sydney University. A new station should be added to the existing underground line in Waterloo, to meet the growing needs there," she said.

That is also the view of Mr Schroeder. "You could easily put a station on the Airport Line," he said. "You've already got a railway line – why not use it."

The letter, however, makes a number of arguments against a Sydney University option. Students only attend classes 26 weeks per year, it says. Plus, the university already has a diverse range of transport services.

When the existing airport rail line was being planned in the 1990s, the government allowed for the possibility of an extra rail station at Doody Street, near the popular Alexandria Grounds coffee shop.

Another rail station further north at Waterloo might also be possible.

Geoff Turnbull, the convenor of local group REDWatch, said the problem with the Redfern versus Waterloo debate was that it was not occurring in the context of a thought-out transport plan for the city.

Mr Turnbull said he also had concerns, despite promises by UrbanGrowth, about whether public housing numbers would be retained.

"We want to make sure this isn't an excuse to totally remove more public housing from the inner city," he said.