Residents living close the site currently proposed next to the nearby Number Seven Reservoir think an idea to give visitors a unique Indigenous camping experience is fantastic.

They are worried about potential amenity issues at the spot earmarked for development.

They think they have a solution that could provide a win for everyone, including visitors who would get better views and be closer to a water body they could swim and fish in.

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Aboriginal corporation DJAARA wants to create an immersive Dja Dja Wurrung cultural experience among existing trees in the forest next to the number seven reservoir.

It would have up to 15 low impact tent-based campsites around a centralised gathering space complete with a shared fire pit and welcome ceremonial fire.

Three people who live in the area have raised concerns about amenity impacts including Brad Spence, whose home would be within site of the campground.

He also wondered whether the campers themselves would want to be so close to properties like his.

"If you are looking for a true camping experience, are you going to want to camp so near to residents?" Mr Spence asked.

Big Hill resident Leigh Tuckerman said his concern was campfires getting out of control in the fire pits on site.

"When this is developed there will be fire pits and yes, there will be safety areas, but the fact is there will be fires introduced here. They are not currently here," he said.

Mr Spence raised concerns about potential arsenic in the soil as well as asbestos that could have been dumped there historically.

"We believe that it would be a lot of money to clear waste here," he said.

"This has been here for a long time and it would be disturbed during the construction process."

Mr Spence and Mr Tuckerman are among residents who have suggested a site about 1.5 kilometres away on the other side of the park.

That clearing is part of land currently owned by the City of Greater Bendigo.

The change would essentially move the proposed campground from the southern tip of Number Seven Reservoir to a rise that overlooks Crusoe Reservoir from the north.

DJAARA representatives were among those who met with community members recently to address some of the issues raised by residents, along with members of the City of Greater Bendigo and other authorities that are part of the planning process.

A DJAARA spokesperson confirmed the campsite's location would not change, partly because any site needs to be owned by Parks Victoria in order to qualify for $2 million in government funding.

DJAARA prefers the current site because it is in the bushland itself, with expansive canopies and extensive vegetation, which it plans to bolster with culturally important food and fibre plants currently missing from the landscape.

The site also connects to a network of trails throughout the park.

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DJAARA is currently working on a fire management plan, which would include only allowing campfires to be lit in designated pits.

All campers would need to follow Fire Forest Management Victoria regulations including always being in attendance at a campfire and having 10 litres of water on hand.

No fires would be allowed on total fire ban days and the grounds would be closed on days of extreme bushfire risk, DJAARA said.

The group said it was also discussing the design of a buffer zone with residents to help increase their privacy.

It planned to use a paid booking system and a boom gate to control who camped in tents on site.

Parks Victoria officers would be allowed to move people who had not booked a site on and hold them accountable for any anti-social behavior, DJAARA said.

The Indigenous corporation said it would continue to consult with the community as the campground plans came together.

"Larni Yirrip will be a space for the whole community, building upon what is currently offered at Crusoe Reservoir and No.7 Park," the group said in a statement.

"The campground is being set up to support community gatherings, guided walks, tours, educational school, bush kinder activities, and the junior ranger school holiday program, with the potential to expand into other cultural tourism opportunities."

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