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A major tourist island is demanding compensation from the government for dumping a crocodile on its beach, saying it was a drawcard for holidaymakers.

Queensland Tourism Minister Desley Boyle insists crocodiles in urban areas are an attraction rather than a deterrent and can give cheap thrills to international tourists.

Ms Boyle yesterday told Parliament in Cairns that crocodiles in waters close to populated areas lured tourists and provided them with photo opportunities.

Her comments came amid growing outrage at the Environmental Protection Agency's decision to relocate a crocodile from Bamaga, in far north Queensland, to Barramundi Creek, south of Townsville, as part of a satellite tracking program.

The crocodile, dubbed Whitey by locals, has now shifted itself to a more luxurious location in waters off the popular resort setting of Magnetic Island.

Tourist operators are outraged after beaches were closed when Whitey was spotted and a local council candidate has organised a "Stop the Croc" rally for Sunday.

The Opposition used Parliament to attack the crocodile conundrum, questioning the Tourism Minister over whether she could "spot the obvious problem" with the animal in a tourist destination.

However, Ms Boyle insisted tourists were fascinated with crocodiles and would frequent those locations where they could experience them first-hand.

"The last time one (that) was spotted in waters fairly close to Cairns Esplanade the tourists flocked there in some numbers with their cameras and absolutely enjoyed taking photographs," she said.

"The fascination with our wildlife, including our dangerous wildlife, is a drawcard to tourists in the tropics, far from it being a barrier or a means of dissuading them from coming."

Premier Anna Bligh also insisted crocodiles were a "tourist drawcard" but had their place in waters other than those used frequently for swimming.

"Clearly the crocodile that is currently being followed by the EPA in and around the Townsville area is not in the right place," she said.

Ms Bligh said she had asked Sustainability Minister Andrew McNamara to examine whether the research program developed by the University of Queensland and the late Steve Irwin provided value for money.

Opposition Leader Lawrence Springborg described the crocodile relocation as a "lunatic experiment".

"The people of Magnetic Island were very happy not to have a crocodile until Anna Bligh and her government gift wrapped one and sent one to the people," he said.

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