The Chinese tycoon at the centre of a storm of controversy over plans to buy a tract of land in Iceland for a tourist resort sought to calm fears in an interview with state media Wednesday.

Huang Nubo, chairman of Beijing-based property developer Zhongkun Group, told the official Xinhua news agency that it was a private business project and there was no Chinese government backing.

"The project is a purely commercial move and has no connection with politics. I believe the project will benefit both my company and locals," Huang said in the interview.

The "beautiful landscape" of Iceland gave the project potential, he said.

The developer plans to buy 300 square kilometres (about 200 square miles) of land and invest a total of $200 million to build a luxury resort with a hotel, golf course and sports facilities, Xinhua said.

The Financial Times, which reported the project this week, said opponents have warned it could give Beijing a strategic foothold in the North Atlantic.

Iceland occupies a strategically important location between Europe and North America and has been touted as a potential hub for Asian cargo should climate change open Arctic waters to shipping.

Huang confirmed his past history as a government official but denied his company had government support.

He previously worked for China's Ministry of Construction and the ruling Communist Party's propaganda department. Zhongkun was set up in 1995, according to the company's website.

The Chinese property developer and local landowners had reached a preliminary deal, but still needed approval from Iceland's government, according to the interview.

Iceland's interior minister has stressed that under Icelandic law such a sale of land -- part of which is owned by the state -- to a foreign entity would be illegal.

For it to become possible a special exemption from the law would be required, minister Ogmundur Jonasson said Tuesday in Reykjavik.

Huang said the investment would also require approval from the Chinese government, which could take up to six months.

China is encouraging companies to invest abroad as part of a strategy to create global firms and utilise its massive foreign exchange reserves.

Huang pledged to evaluate the environmental impact of the project and promised to surrender the rights to "exploit" water resources as the land includes one of Iceland's biggest glacial rivers.

He added that he had personal ties to the country through an Icelandic friend in the 1970s and cultural activities. The businessman said he had donated money for exchanges between Chinese and Icelandic poets.

"(Iceland's) landscape impressed me very much and local business people expressed that they were interested in attracting Chinese investment," he said.

Iceland's booming economy collapsed in 2008 when its hugely overstretched banking sector plunged suddenly into crisis and its three major banks collapsed within a matter of weeks.