Meeting in Wollongong on Monday, the Southern Joint Regional Planning Panel cited the "enormous investment in the application to date" and the possibility that an agreement between developers and planning authorities could yet be reached as reasons for keeping the $66 million Regency Towers development dream in play.

The planning panel deferred the application until February and ordered applicant David Shalala, designer PRD Architects and planning consultants Cardno to organise a peer review of their plans.

The third party would potentially serve as a "circuit breaker" between the backers and the council's design review panel, said planning panel chairwoman Pam Allan.

"When we're talking about design, sometimes [the developers] have got very firm views that their design is acceptable. At the moment, the design umpires don't believe they are acceptable," Ms Allan said.

"So we're suggesting they go off, get some more views - a peer review - bring that person back to the discussion they have with the design review umpire and see if they can make progress that way."

It is unusual for the council to object to a development on aesthetic grounds.

Standing on Wollongong's tallest hill, the 29-storey development would be the city's most visible building.

"In all the years we've been coming to Wollongong, this is only the second instance where there's been a major disagreement from the design review panel," Ms Allan said. "There's a couple of issues which we think can still be addressed, that's why we've decided to continue to give [the project's proponents] oxygen."

The project's backers have also been asked to provide a 3D model and rejig the eastern facade "to reduce the perceived bulk of the building".

They must address traffic engineers' concerns about access to the development, which is slated to include a "major" hotel, and provide a detailed response to the design review panel's comments.