The land at Gilestone Farm has flooded, following this week's period of heavy rain.
Purchased by the Welsh Government for £4.25m last year, the land at Talybont-on-Usk, next to the River Usk, was purchased before a full business plan had been set out.
There are currently concerns that the owners of Green Man Festival could hold large scale events at a property. Officials have told local councillors that there are plans to host multiple gatherings a year at the site, for thousands of people.
A meeting was held in November last year between the Welsh Government and Talybont-on-Usk Community Council, where concerns about the plans were raised.
According to the minutes from the meeting, the Community Council's Working Group said that "the fundamental issue was the concerns around mass tourism events and the impact on the ecology and environment".
Consultation on future plans for the site is due to continue this year, with Welsh Government officials saying that no final decision has been made.
Prior to the purchase, there had been no ministerial visits to the site and no advice was taken from the music industry on if the site was appropriate.
James Evans, MS for Brecon and Radnorshire said: “One of the big concerns I had about Welsh Government purchasing this site was the obvious flood risk – and today it is under water.
“This flood risk was and remains an obvious danger. How can it be a safe site for festivals and events when it is as such risk of being flooded?
“There have been huge question marks about this entire process, and we desperately need light shone on this entire murky situation which has cost taxpayers millions without an open process.”
Mr Evans also submitted a question to the Welsh Government, asking how much funding Green Man had received from them in the past five years. A Welsh Government response to the Written Question shows that Green Man has received £481,000 from Welsh Government in the past five years, provided under the COVID-19 Cultural Recovery Fund.