The $200,000 monument is being proposed for Jerilderie and is one of 28 ventures that residents of the Albury electorate can vote for as part of the NSW government's My Community Project scheme.

It would show Monash, who became a top World War I army chief, as a 12 year-old boy receiving a shilling from Kelly for holding his horse at Jerilderie.

But Leo Kennedy, who wrote the book Blacksnake - the Real Story of Ned Kelly and is the great grandson of a policeman killed at Stringybark Creek, says the statue proposal is atrocious.

"We should not be perpetuating myths, we should be perpetuating facts," Mr Kennedy said.

"The Monash-Kelly story is a fiction, it never happened.

"When the Jerilderie raid took place, John Monash no longer lived in Jerilderie...he was with his mother in Melbourne."

Mr Kennedy said reports that Monash told of meeting Kelly reflected the general's penchant for tall tales at dinners in his later years.

Jerilderie's Irene Wells, the initiator of the statue proposal, cited the meeting being recorded in a 2014 biography of Monash by Roland Perry.

"I'd say those who doubt it, let them prove it didn't happen," Mrs Wells said.

"It's something that could easily have happened.

"There's statues all around of Sir John Monash in uniform and civilian clothes, there's lots and lots of them; we thought because he was a boy at the time in Jerilderie it would be quite unique."

Fellow statue proponent Sue Neilan said the idea had the support of Monash's great grandson Michael Bennett and former deputy prime minister and Monash biographer Tim Fischer.

Three sculptors have provided quotes for the work which Mrs Wells believes will be erected even if they fail to win the funding contest.

Albury district residents can back the statue, or another nominee, online at mycommunityproject.service.nsw.gov.au until August 15.