A report by the Northland and Auckland councils says they should ban genetic modification projects because New Zealand's weak liability laws mean ratepayers would be left footing the bill for any mishaps.
The report says the ban could be reversed if a company or researcher could guarantee their project was safe.
It criticises national legislation for not holding companies or researchers liable for problems when there is still uncertainty about the impacts of genetic modification.
Kerry Grundy, who worked on the report, says councils have learnt from the leaky homes fiasco that liability loopholes usually result in them paying the bill.
Mr Grundy says under a ban, projects could go ahead if they are insured, and consents and plan changes are signed off by councils.
The Environmental Protection Authority, which is responsible for approving genetic-modification projects, was unavailable for comment.