Sting's New Year's Eve headlining gig has been pulled out due to heated protests of residents and the Sydney City Council.

Former minister Ian Macdonald originally scheduled the concert for 80,000 people at White Bay and fixed a taxpayer contribution of $300,000. However, his successor Kevin Greene contested, saying that Sydney is "already at capacity" on December 31.

"This matter was handled by the previous minister. I made a different decision," Mr Greene said of the situation.

The new prime minister consulted Events NSW about moving the concert at a later date, but concert promoter Andrew McManus refused the suggestion and asked Mr Greene why "he destroyed this opportunity for the people of Sydney". According to Mr McManus, he has already shelled out $130,000 in the planning of the event.

After settling the matter, Mr Greene suggested that Sting play his New Year's gig in Melbourne instead, saying, "There's enough going on in Sydney on New Year's Eve for everyone, so if Melbourne wants some reflected glory by holding a Sting concert, then they can have it. Sydney's New Year's Eve celebrations are shown around the world. Melbourne's New Year's Eve is seen by Melbourne."

Melbourne's Minister for Major Events Tim Holding wasn't offended by the remarks made by Mr Greene and said he would be glad to talk to Sting's management about scheduling the concert.