Plans to integrate residential developments into central Cabramatta to create a more vibrant environment have been blocked by the NSW Planning Department.

Fairfield Council submitted a changed Cabramatta LEP (local environment plan) to the department in 2005 and is still awaiting approval so residential blocks can be built in and around the town centre.

The proposal would also see Dutton Lane car park redeveloped to include additional civic open space.

Fairfield councillor Thang Ngo said the delays to Cabramatta's new plans had been made worse by proposals put forward by the NSW Metro Strategy.

"Cabramatta in particular would benefit from a new plan, but what we need is the ability to build new residential developments, not office blocks that's not what people in Cabramatta will use," Cr Ngo said.

"Cabramatta has a strong retail sector, that's where we need to make it competitive with places like Westfield by introducing more of a vibrant community feel with residential areas."

The west central sub-regional strategy, part of the wider Metro Strategy, projects Cabramatta to grow into a major centre incorporating office blocks and higher density employment.

However, the council wants to see Cabramatta grow to town centre status instead, meeting its Metro Strategy employment targets through increased retail opportunities but not in competition with other major centres Fairfield, Liverpool and Parramatta.

Concerns have also been raised about the long-term viability of Cabramatta as a major centre after the South Sydney Freight Line is built, dividing the town in half.