Blue Mountains MP, Trish Doyle, and ward one councillors were barred from attending a walk-through of highway upgrade proposals over the weekend.
Some members of the Blackheath highway co-design committee (BCC) had asked Transport for NSW if the politicians could join a tour of the route options.
But TfNSW said if they attended, the tour would be cancelled.
The independent committee facilitator, Tricia Wunsch, in an emailed response, said the walk-through had been requested by the committee members to better understand all the options and it was effectively a BCC meeting.
"Only members of the BCC will be permitted to attend the inspections; if other people are present, TfNSW will cancel the inspections."
Ms Wunsch continued: "All members of the BCC, including you, have signed a code of conduct outlining your obligations and agreement to the BCC process.
"I'd particularly like to remind you of the following requirements, to ensure confidential matters handled by the committee, as indicated by the chair, are kept confidential, and not speak to the media on or off the record or through third parties about committee matters."
Ms Doyle said: "The fact that the NSW Government would rather completely shut down community consultation than have elected representatives attend says everything you need to know about this project."
The mayor, Mark Greenhill, said he was astonished that not only was the request to have the politicians join the tour denied, "it was accompanied by an implied threat against those members of our community with the email suggesting breach of undertakings should people confide in elected representatives or the media".
"This is fundamentally anti-democratic. To tell locals that the very people they elect to represent them cannot attend relevant discussions is shocking.
"Why would the state government want to exclude elected representatives? What have they got to hide?"
Alister Lunn, acting director west for TfNSW said the tour was designed to help the committee visualise the proposed routes.
"The committee is made up of people from community groups, emergency services, council staff and the local business chamber and as an apolitical forum, does not include elected representatives from any level of government.
"Transport for NSW is happy to arrange a similar site inspection for local elected representatives if requested. However, Blue Mountains City Councillors are briefed after each committee meeting."
He said some options had initially been more popular than others, all options had to be considered during the co-design committee process.
"We will seek further input and feedback from the wider community during the next phase of community consultation."
Meanwhile, a massive shortfall in funds for the highway duplication project has been revealed in state government papers obtained by the opposition.
The government initially promised $4.5 billion for the duplication from Katoomba to Lithgow, a figure since reduced to $2.5 billion.
But there is only $268 million budgeted over the next four years in forward estimates.
Transport officials warned the government after last year's election of a nearly $8 billion shortfall in funding for road projects, including 26 key election commitments, the opposition said.
John Graham, shadow minister for roads said: "The Government promised these roads and this road spending at the election. Now they're breaking those promises."
The commitments were costed by the Parliamentary Budget Office on the advice of TfNSW prior to the election.
In September, the Roads and Maritime Services asset management plan indicated it was 'almost certain' election commitments would not be met. One of those commitments was the duplication of the Great Western Highway.
Mick Veitch, the shadow minister for rural roads, said: "It is a scathing indictment on the minister that, despite advice from the professionals, he feels these projects ... aren't worth properly funding."
