The 170-hectare Fan Ling golf course could be redeveloped into a massive housing complex for 100,000 people, according to an environmental group.
Green Sense made the proposal to help the government - which wants to develop three areas in northeastern New Territories - "in saving time and money."
But the proposal immediately drew fire from some members of the Hong Kong Golf Club, which operates the course.
Herman Hu Shao-ming, chairman of Ryoden International and son of its founder, Hu Fa-kuang, said it would be ridiculous for Hong Kong not to have a world-class course, given its global position.
"I don't mind if I can't play golf, but Hong Kong must have its own course as an international city to attract investors to visit," said Hu.
He said Singapore has more than 20 courses, some of them bigger than the Fan Ling one.
Green Sense said a group of young architects is ready to draw up a blueprint for the redevelopment of the course at south Kwu Tung.
It could even include a replica of the old Lai Yuen park of Mei Foo as an alternative to Ocean Park and Disneyland.
Green Sense president Roy Tam Hoi-pong said since the land is owned by the government and leased by the golf club, "the government can take it back after giving the club a year's notice."
He added: "We chose this specific course for a redevelopment plan as it's the only course whose land belongs to the government. It's also close to the three development areas at northeastern New Territories proposed by the government."
He expects residential buildings can be completed in 2017 if Green Sense's proposal is adopted - five years earlier than the government's target date for finishing the building of homes in the area. "Following our proposal, the government can save time and money taking back land from residents of north Kwu Tung, north Fan Ling, Ping Che and Ta Kwu Ling," Tam said.
The Fan Ling course is frequented by tycoons, including Cheung Kong Holdings chairman Li Ka- shing, and former officials, including Frederick Ma Si-hang, who used to be the secretary for commerce and economic development, and Ambrose Lee Siu- kwong, ex-secretary for security.
The club, established in 1889, has a 20-year waiting period for applicants. The secondhand market price for membership is around HK$14 million.