The Dunedin City council has told a court a quarry near Saddle Hill does not have the legal right to expand.
The Environment Court has begun hearing arguments about the future of the quarry, which is blamed for degrading the ridge line to the prominent landmark south of Dunedin.
The council took the case to resolve more than 40 years of objections from residents to the further removal of rock.
Council lawyer Michael Garbett says it is not trying to shut the quarry at Jaffrey's Hill, but restrict its boundaries.
He says the council objects to any plan by the quarry to expand its footprint, further eroding the hill's shape, because it does not have the legal right.
But the quarry says it has the right to take rock and keep altering the skyline as it always has.
The quarry's lawyer Colin Withnall QC presented a number of council references since 1960 to a consent being given without any limits to the quarry's scale.
He says it does not hide the fact removing rock changes the skyline.
Mr Withnall says the only way to stop quarrying has always been to buy out the owners, but no government or council has ever been willing to do so.
Residents around Saddle Hill say the quarry is cutting into Jaffray's Hill, eroding the shape of the ridge.
It was first named by Captain Cook and looks over Mosgiel and the Taieri Plains.
Last month the council obtained an interim enforcement order to stop the quarry's owner, Saddle Views Estate, from work which could erode the hill's shape.