Waikato Regional Council is supporting a bid by New Zealand Mushrooms to extend the operation of its controversial composting plant near Morrinsville until the end of next year.
In December, New Zealand Mushrooms announced it would close the plant and its nearby mushroom factory, costing 160 jobs, because it could not comply with an Environment Court ruling to eliminate objectionable odours.
The company has now asked the court to let it continue operating as it is for two years to enable it to expand its Canterbury site and then source its compost from there.
New Zealand Mushrooms says if this happens, it can retain all jobs at its growing operation in Morrinsville.
The regional council says the company's plan would allow it to avoid job losses while ensuring the end of the odours within a definite period.
The decision will now be up to the Envrionment Court.