In front of an overflowing public gallery at Monday night's ordinary meeting, and after a mammoth two-and-a-half-hour debate - which included six amendments being put forward - the council finally resolved to defer the project.

It also committed to investigate reclassifying "all or part of" the proposed development site on Bath St and Victory Row to community land.

Staff had recommended council pursue a planning proposal to have the controls of Lake Macquarie Local Environmental Plan 2014 reviewed for the development to proceed.

The recommendation came after the Department of Planning said it was unlikely to support amending local planning controls for council's land only.

But Lake Macquarie mayor Kay Fraser moved an alternative motion to defer any further work on the planning proposal and plans for the development until a comprehensive review of council's property portfolio was undertaken. She received immediate applause from the public gallery.

However, what followed was what one councillor described as a "democracy train wreck".

Cr Fraser had implored councillors before the meeting to support her proposal, saying it was "time to pause and reflect on the next steps".

"We have heard from the community and I feel that our previous decision even though it was well intended and we believed it was in the best interests of our community may not now be the right decision," she said.

Cr Jason Pauling said by deferring the project the future of the site was not clear. He moved an amendment to progress with the planning proposal but it was defeated by the mayor's casting vote.

"This is an opportunity for us to address something that has been an eyesore for 30-odd years," he said, before calling the development site a "dust bowl".

Cr Pauling said it was "disgraceful" a model of the proposed development was only being shown for the first time in the council chamber's foyer.

Cr Kevin Baker moved a second amendment, also defeated, proposing an "external investigation, review and audit" into the project and for consultation to take place about the best use for the site.

"This has been an absolute failure of a process," he said. "We've potentially blown a million dollars of ratepayers' funds."

Cr Wendy Harrison said a deferral would be "wonderful news for the Toronto community", but raised concerns that there was no plan to change the development site to community land, saying it might "languish for another 30 years".

She moved an amendment proposing it be reclassified as community land, but it was defeated 11-1.

Cr Adam Shultz said it was "not time to charge over the hill", but he tabled a list of 45 council resolutions which had been made about the site since 1984 and said they showed there had always been plans to develop it for tourism.

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Cr Pauling moved a fourth amendment, similar to Cr Baker's, but it too failed to get up.

Cr Brian Adamthwaite then moved a fifth amendment that was similar to the mayor's alternative motion but proposed commencing investigations into reclassifying "all or part of" the proposed development site to community land.

Cr Fraser said she supported the amendment and thought it was a "great outcome".

Cr Baker spoke against the amendment and said it "showed no clarity" about the future of the site. He said it was about "playing it out until after the [2020] election.".

"The community have a crisis of confidence in council," he said.

Deputy mayor David Belcher said councillors had to recognise it was "our mistake from the start" not to consult the community on what it wanted for the site.

Before Cr Adamthwaite's amendment was passed at the motion with an 8-4 vote, Cr Kevin Baker moved a sixth amendment to cease any further work on the development and commence a process to reclassify the entire site from operational to community land.

He also proposed commencing development of plans to turn the site into a park, along with the remaining foreshore land which a master plan is being prepared for.

He admitted the amendment was not his "preferred option" but it "made a clear statement" and "gave the community some confidence" ahead of the election.

Cr Barney Langford accused Cr Baker of doing a "double-backflip with pike".

Cr Harrison said the amendment ruled out development on the site, which was what the community wanted, but it was ultimately defeated.

Cr Pauling proposed moving a seventh amendment until the Labor party's pre-selection for the election. It was dismissed by the mayor who then tore into the Liberal councillor after he would not return to his seat.

"You've all overstepped the mark," she said, standing from her chair.

"You need to have a good rethink about how you've conducted yourselves tonight."

It drew applause from the public gallery.

Cr Fraser closed by saying it had been a "long and protracted night".

She apologised for the conduct of councillors and said she hoped the passed motion addressed the community's concerns.

She said the community would be involved in a consultation process "extensively" about determining the future of the site.

"You can walk away from here, guaranteed, that no work will continue on the Bath Street development," she said.

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