However, not all residents living in the high-density inner suburb are fans of the child-friendly area.

The playground has turned into something of a local battleground – dividing local residents including actor David Wenham and writers Louis Nowra and Mandy Sayer.

And in the latest instalment of the ongoing feud, parents and children are horrified that part of the play equipment has now been torched in a suspected arson attack in the early hours of last Wednesday.

Police believe that someone willfully set fire to the tyre swing, completely destroying it and causing thousands of dollars damage, at about 4am.

"We will not tolerate the wilful destruction of any property ... and targeting a children's playground is just beyond the pale," said Superintendent Michael Fitzgerald.

The arson attack is the latest development in a string of incidents in the ongoing neighbourhood battle over Fitzroy Gardens playground.

In March, police were repeatedly called to the playground to investigate a spate of egging attacks.

Officers were told that people in a nearby building had thrown eggs as children played in the playground 25 metres below.

Kings Cross Parents and Carers Group convenor, Claudia Bowman said that the playground has been a "divisive" facility within the community for a number of years.

She said the most recent arson attack followed incidents where "dog poo and urine" had been smothered over the play equipment.

Kings Cross resident Ian Cassie said it was concerning some of his neighbours could get so heated about a piece of play equipment.

"They think they are defending traditional Kings Cross bohemian values of (the area) being alternative and not family-friendly," he said.

Fitzroy Gardens has featured children's play equipment since 1939.

Four years ago however Ms Bowman petitioned for an upgrade of the facilities to account for the "significant and growing" number of young families in the suburb.

Some members of the community opposed the plans to upgrade, including the local residents' association backed by some high-profile residents including writers Louis Nowra and Mandy Sayer.

Lord Mayor Clover Moore, who was in support of the upgrade which was completed in April 2014, said that having access to local playgrounds was essential for young families living in villages with high urban density.

"I'm disgusted vandals would deliberately damage a local playground that's used and relied on by hundreds of families who live in the area," she said.

Cr Moore said more and more families were now living within the City of Sydney with a 22 per cent increase in households with children between 2006 and 2011.

"Local parks and playgrounds function as their backyards," she said.

Since the upgrade, the local council has received complaints about high levels of noise coming from the area.

Peter Young, from the Residents' Association said that the group had now "accepted reality" and moved on. There was "no policy to destroy" the playground, he said.

Ms Bowman has urged the City of Sydney and police to increase CCTV surveillance around the playground to act as a deterrent against further attacks.

A council spokesman said cameras on the playground are not considered necessary at this stage.

Ms Bowman believes something should be done to end the conflict within the community.

"We need healing in the neighbourhood" and "the opportunity for people to come together to resolve this."

Police said they are continuing to investigate the incident.