Previously a director at Waverley Council for 15 years, Dr Kelly is now petitioning her former employer to build a 750 square metre pavilion deep in the gully beneath the cemetery's iconic coastal walk. In addition to hosting undercover funerals, the space would contain a library branch for genealogy research, a florist and a gift shop.

"It would probably become an iconic building," she says. "There's nothing like it anywhere."

Dr Kelly says time is running out to save the 137-year-old graveyard from land slippage and financial distress. The site is vulnerable; it is situated on geological dyke filled with building waste between two walls of rock, the sand has drainage issues and the base is inundated by waves. Two weeks ago a one-metre hole opened up on a road near the gully.

A 2010 geotechnical review of the coastline found risk to the cemetery was "tolerable" but liable to escalate. Climate change and increased erosion rates would make instability likely in the next 50 to 100 years, risking life and property, the report said.

Dr Kelly says the cemetery is "unstable" and without structural repair "it is likely to suffer either a sinkage or a collapse". A pavilion would help stabilise the gully and generate the ongoing revenue needed to fix ailing infrastructure, she says, and would not disturb any of the site's 50,000 monuments.

The idea has been on the drawing board for a decade but never gained traction. In June, the council deferred borrowing $12 million for site works, including $3 million earmarked for the pavilion.

Mayor Sally Betts said the council would continue to monitor the site but there was no danger of slippage at the moment. The pavilion plan would have distressed the community, required "extraordinary borrowing" and had never been financially justified, she said.

"There were too many unanswered questions. No matter what you do, you need to bring the community with you," she said.

The cemetery, which boasts the country's most expensive graves, is also suffering from the declining popularity of burials. Two thirds of Australians now prefer to be cremated, according to McCrindle research.

"The market has changed dramatically," says John Desmond, a financial consultant who works with local government on matters gravely.

"[Cemeteries] face massive financial challenges because most of them haven't put aside any reserves to cover long-term maintenance."

Mr Desmond has examined the pavilion plan and believes it is the most viable option for the Waverley site - other than selling the land for redevelopment.

Dr Kelly has amassed almost 1000 signatures to "Save Waverley Cemetery" and says it will be the biggest petition the council has ever received. She believes the council has been spooked by residents who fear the pavilion would be a Trojan Horse for a crematorium, a notion she rejects.

"I really don't know why the locals are against it," she says. "Maybe it's something to do with not wanting to think about death."