Dame Carol is suing first-time director Hollie Fifer to prevent the release of her 77-minute documentary The Opposition about the struggle to stop the eviction of 3000 people from a decades-old squatter community to make way for an Australian-backed property development that is promising a hotel, marina and exhibition centre.

In a Hollywood twist, Dame Carol is petitioning the NSW Supreme Court, claiming she was not the "freedom fighter" and "hero" of the eviction drama she is portrayed as in the documentary and she believed Ms Fifer was only following her as part of a "school project" that would not become a commercial release.

But a former ally of Dame Carol claims she does not want the documentary to be seen because she is now being paid as a consultant to the development company that evicted the settlers.

Ms Fifer's film, which has received funding from Screen Australia and Screen NSW, revolves around the day in 2012 when 100 PNG police armed with assault rifles and machetes stood guard as bulldozers began to demolish the homes of settlers at Paga Hill, a prominent headland on Port Moresby's Fairfax Harbour.

Paga Hill was once the focal point of Australia's World War Two defence of Port Moresby. The thousands of settlers who moved there in the decades after 1945 became known as "bunker people" for their use of abandoned wartime fortifications to create makeshift homes.

Since the 1990s, the 14-hectare site had been coveted by Australian-Icelandic businessman Gudmundur "Gummi" Fridriksson, a former chief executive of Noel Pearson's Cape York Institute, who lives in Cairns

Mr Fridriksson's Paga Hill Development Company (PHDC) convinced former PNG Minister for Civil Aviation, Culture and Tourism Michael Nali to declare the $300 million proposed development as a project of national significance.

PHDC was later granted a 99-year lease in 2000 and, shortly after leaving politics, Mr Nali took up shares in the company, which he no longer owns.

When the bulldozers entered Paga Hill in May 2012, Dame Carol, the then PNG Opposition Leader, stepped in front of them.

Footage from the time shows her pleading with policemen to stop the destruction. "This is not an eviction, it's a demolition," she insists.

"Stop the demolition. Just ask them [the bulldozers] to leave and they can take their houses down because they will sue the company, I tell you, this unacceptable."

A press release issued at the time by Dame Carol said the Australian-backed company had no "fundamental rights to this prime real estate" and its resettlement plan for the settlers was "disgusting"

Ms Fifer filmed the demolition with Dame Carol's blessing at the time.

The filmmaker's 2013 funding pitch describes Australian-born Dame Carol, who moved to PNG at 19 and married Buri Kidu, the man who would become the country's first indigenous Chief Justice, as an "unlikely hero" and "one of Australia's most mobile and active freedom fighters".

"When Port Moresby policemen are paid 10,000 Kina to bulldoze the Paga Hill settlement ... Dame Carol places herself in the line of fire to save the people. Her fight to stop the construction of the next five-star hotel will lead her into dark places and the murky world of international finance and corruption," according to the pitch.

But within months, the landscape had changed dramatically.

Months after retiring from politics, Dame Carol established a private company, CK Consultancy Ltd, which was later engaged by PHDC to advise and champion its resettlement scheme.

In a letter to Mr Fridriksson in July last year, Dame Carol "formally clarified" criticisms she made of PHDC in 2012 and 2013 and said she had always accepted the inevitability that the settlers would be relocated.

"I went to the scene as the local member of parliament because of my concern for the welfare of the women and children. I went there on humanitarian grounds," she wrote.

She told the company she had formed opinions on "assumptions and incorrect information" and pointed to the decisions of the National and Supreme Courts that had agreed with the PNG Government that PHDC's lease was legal.

"After working closely with the company during the relocation exercise, I realise now with the benefit of hindsight, that Paga Hill Development Company's efforts to achieve harmonious resettlement have been genuine," she wrote.

"Please accept this letter as my formal notification that I no longer stand by my 2012-2013 statements which were based on the limited information at the time."

Her change of heart stunned Kristian Lasslett, an expert in state corruption in PNG whose report for the International State Crime Initiative cast doubt on the process that awarded Mr Fridriksson's company the lease. The report found "serious question marks" over a web of Fridriksson companies that have done business with the PNG Government.

In 2012, Dr Lasslett spoke alongside Dame Carol at an event to raise funds for the community's attempt, led by settler Joe Moses, to protect their homes from the bulldozers.

"Dame Kidu had very publicly led the charge against the Paga Hill Development Company in 2012. She accused the company of having obtained the land through fraud, and worked tirelessly to help the community raise funds for their legal case," Dr Lasslett told Fairfax Media.

"Dame Kidu was instrumental in helping me gain access to vital records relating to the contentious land deal.

"However, our exchanges ceased in 2013 when Dame Kidu informed me her company CK Consultancy had been contracted by the Paga Hill Development Company to relocate Paga Hill residents. It came as a huge surprise, in light of her vocal past stance."

Dr Lasslett, supports the release of The Opposition which has been selected for North America's biggest documentary fim festival, Hot Docs, and likely other film festivals in Europe and Australia.

Dame Carol, who has engaged Australian law firm Kennedys, is seeking to prevent the film showing in any forum.

In a statement, Mr Fridriksson said Dr Lasslett's research was flawed. "Formal complaints have been raised with the International State Crime Initiative and the universities that sponsor him, including an in-person meeting in London, and I understand he is under investigation," the statement to Fairfax Media said.

"Lasslett's report persists in quoting outdated findings to suit his pursuit, ignoring the fact that these have been overturned by PNG Courts, Government authorities and its Executive Council."

The film's producers have agreed not to show the documentary until at least April 4 ahead of an expected hearing in court in mid-April.

In a statement, they said the documentary is "thoroughly-researched, considered and checked both legally and journalistically by professionals with extensive experience in PNG culture and politics".

They have offered to insert a line in the credits that Dame Carol has disassociated herself completely from the project.

In an interview with Fairfax Media, Dame Carol said she believed the film makers wanted a "David and Goliath" story line and they have failed to understand the complex nature of the Paga Hill eviction and the "pragmatic reality" that the settlers were always going to have to vacate the land, in her view.

"I know people will accuse me of being bought off. I'm not [PHDC's] stooge, it's just that this film is unbalanced."

The film's main protagonist, Joe Moses, is now in hiding. According to the two sides of the Paga Hill debate, he is either in fear for his life after threats by PNG police or hiding from fellow settlers who gave money to the Paga Hill legal case he co-ordinated.

PHDC claims on its website that the site "is expected to be ready to play a key role hosting the Leaders' meeting at the APEC Summit in Port Moresby in 2018".