The council was last night due to decide on the structure of an estuary management committee, after the NSW government scrapped the former Lake Illawarra Authority (LIA) more than six months ago.

The new committee was to be jointly formed with Shellharbour council, with the two councils spending $150,000 annually on the committee, with Wollongong supplying $100,000 and Shellharbour $50,000.

However, these plans crumbled after several Wollongong councillors voiced concerns about the costs associated with the lake's management.

Cr Vicki Curran pointed out the former LIA had cost the state government $962,000 a year, while the new management committee would have just $150,000 to invest annually.

Cr Ann Martin remarked that this amount "would not even mow the grass".

Deputy Lord Mayor Chris Connor said the government was transferring "millions of dollars" in costs and responsibilities onto the two councils and needed to be held to account before any decisions on the committee were made.

"I just see this at the moment as a great impost upon this council, an enormous financial hole that we're going to throw buckets and buckets of money into, into the future," he said.

"The state government will gradually withdraw all financial support over time, and we will be left with management of the lake."

He said the council would inherit responsibility for wharves, stormwater drains, buildings and "other traps", and called on a stronger commitment of funds from the government.

In a heated speech, Labor's Janice Kershaw hit out at the government, moving a motion that "the establishment of the Lake Illawarra estuary management committee be deferred until the state government gives a firm commitment to the budgetary allocation".

She said she could not support a further financial commitment to the lake in light of the council's financial sustainability review.

"This is nothing but cost shifting," Cr Kershaw said.

"We're talking about transferring this land to us - why would we want it? We can't even manage and pay for what we've got now.

"We're putting out to our community that we want to put our rates up and cut back services, but we have no idea what this is going to cost us.

"Let's be realistic, there's no way we should do any of this."

Councillors unanimously voted to support Cr Kershaw's motion, and called for a separate report to come to the council next year.

However, Shellharbour councillors last night unanimously endorsed a proposal to establish an estuary management committee. 

Councillor  John Murray said: ‘‘I don’t see we have a lot of choice ... there’s no point burying our heads in the sand.’’

‘‘These things are things that people want to use and want to keep. What Wollongong want to do is irrelevant. We need to make a decision regarding the assets in our city.’’

Councillor Peter Moran was mystified as to why Wollongong councillors took the action they did.

‘‘We don’t have a choice and this seems like a reasonable way forward ... we might as well work towards it,’’ Cr Moran said.

Councillor Helen Stewart said she watched Wollongong council debate the issue and commented ‘‘they were all over the place like a bride’s nightie".