Plans to build a dam in the Tasman District are being put on the backburner after a new report recommends that neither of the two proposed funding models for the project should be adopted.
A consultation period, followed by a series of public meetings and hearings has been held in recent weeks, with nearly 800 submissions received on the Waimea Community dam in the Lee Valley.
There has been fierce opposition to the two funding models, which called for 30 percent of the $80 million cost to be met by ratepayers.
Now the council's chief executive, Lindsay McKenzie, is advising staff that the dam model - in its current form - is simply not affordable.
He said the outcome was generally expected.
"It was an incredibly big ask to try and fund a project of this scale and this cost across a relatively modest rating base, but it was a process that we had to complete," said Mr McKenzie.
"The feedback's pretty consistent, it accords with the views of many around the office I guess, especially as it relates to affordability and some of the challenges we had trying to create equity and fairness amongst different types of ratepayers and those that are receiving direct or indirect benefits."
Mr McKenzie said it now paved the way for the council to seek Government and other financial backing for the dam.
He said in order to establish that the project could not be delivered it was necessary to know what external funding, through either direct beneficiaries or ratepayers, would be available.
"I certainly hope it gives people faith in the system, that it actually does work, that the council used its best endeavours to put proposals out there that had the best chance of being accepted, and in the end neither of them resulted in the council getting the sort of mandate that it would have needed to proceed."
Mr McKenzie said he was advising the council to set aside $25 million in the Long Term Plan over the next 10 years to provide for a dam at a later date.