A Chinese adventurer and business tycoon is stirring controversy in Iceland by proposing to buy a chunk of the North Atlantic country for a luxury eco-resort.

Huang Nubo, who was a Chinese government official prior to making a fortune in real estate, plans to buy a tract of land equivalent to 0.3 per cent of Iceland's territory for $8.8 million.

Huang has been known to venture to remote corners of the Earth, having scaled Mount Everest and trekked Antarctica. During a visit to northeast Iceland he says he fell in love with a barren stretch of land known as Grimsstadir a Fjollum. And he wants to buy 300-square-kilometres of property there to build a $175-million luxury eco-tourism resort.

The government in Reykjavik, still reeling from a 2008 banking collapse, has welcomed the venture. But critics argue that Huang's close ties to China's communist party are cause for concern.

Could Beijing be using the deal to establish a presence closer to the Arctic, where climate change might open trade routes and opportunities for resource exploration? Could the Chinese government be seeking access to a deep water port 50 kilometres from the site, or water from a glacier runoff?

On Friday, Huang defended the project at a news conference at his company's headquarters, where he dismissed the conspiracy talk.

The project would be part of a chain of high-end nature retreats in China, the U.S. and Scandinavia, he said. It would also help preserve the local environment and Icelandic culture, Huang argued, and would use only private investment funds.

"If it involved politics or any other background (than tourism), I wouldn't go there," he said.

Iceland's ambassador to Beijing, Kristin Arnadottir, appeared alongside Huang, saying that the proposal fits with Iceland's twin goals of promoting foreign investment and tourism.

"Perhaps we are going to experience something much more positive as Iceland becomes a tourist destination," she said.

Critics of the deal include Jon Thorisson, an architect who has lobbied to keep foreign investors from snapping up Icelandic resources. Due to Iceland's small size, he said the proposal is equivalent to Washington selling off the state of Missouri.

"Will large-scale ownership allow them to exert political influence?" Thorisson said. "Is it possible that we Icelanders will end up like tenant farmers on our own land?"

Andri Snaer Magnason, a writer and eco-activist, questioned whether the resort was economically feasible due to its remote location. He said it evokes memories of the jetsetting Icelandic bankers whose investment practices destroyed their industry.

"It lacks all sense and logic," he said.

Similar deals have run into opposition in other countries -- including in Canada and the United States -- as Beijing has stepped up investment abroad. Critics have questioned whether the communist government may be involved in the business practices of Chinese firms seeking overseas investments.

The most high-profile case took place in 2005, when state-owned Chinese oil company CNOOC Ltd. abandoned a bid to buy U.S. oil and gas firm Unocal Corp. American politicians had complained that the sale went against Washington's national security interests.

But Icelandic Prime Minister Johanna Sigurdardottir has said her country would welcome Huang's investment.

The deal has yet to be approved, however. The government is reviewing investment rules that limit land ownership by foreigners, according to Interior Minister Ogmundur Jonasson.

Huang said he hopes to secure approval from officials in Beijing and Reykjavik by February, and finish the first phase of development for the resort by 2015.

With files from The Associated Press and a report from CTV's Beijing Bureau Chief Ben O'Hara Byrne