The backdown is likely to affect thousands of houses across the city - all properties that are classed as being flood prone - as the statewide planning policy comes back into force.

The move follows agitation about how the regime applied in Woonona, which is now under review by the council.

The council had been preventing some residents from using private certifiers to approve complying development on their properties, forcing these ratepayers to go through the more expensive development application (DA) process.

On Friday, the Mercury confirmed this could apply to thousands of homes.

"Complying development" allows home owners whose plans fit within development rules to have their jobs approved by a building certifier - a simpler, quicker and cheaper process.

The council had blocked this method, known as the Codes SEPP, from being used by home owners on land judged by council to be flood prone.

Council officers met representatives of the NSW Planning Department in January and were told their system did not comply with NSW planning law. The department considered the council's views but early this month again told the council its position was inconsistent with NSW planning rules and must be changed. Last week, this occurred.

This has left residents wondering why their attempts to convince the council its policy was an error had got them nowhere - until the matter was listed on the public agenda for Monday night's council meeting.

"There is considerable ambiguity in the environmental planning legislation related to the Codes SEPP and its application," a council spokesman said on Friday.

"Council officers have been working with the NSW Department of Planning for over six months on this matter and only recently, on March 9, 2015, received a response from the department which has allowed us to amend our application of the Codes SEPP for lots affected by flooding.

"These amendments have been applied to all flood lots across the city."

At Monday's meeting, Wollongong's flood mapping will come under scrutiny when Cr Greg Petty seeks to have the flood study covering Woonona dumped.

Cr Petty says the development rules covering Woonona - and many other parts of the local government area - are not only illegitimate but were also based on the wrong flood information.

The area did not flood in 1998.

"It's almost 17 years since the original floods of 1998 - how much longer, how many more studies, how much more money will be wasted?" Cr Petty said.

"Residents deserve this to be resolved, and resolved now."

In Woonona, the Mercury is aware of some residents who have been lumped with costs running into the thousands of dollars, for having to obey mistaken planning rules, which have now been scrapped. Some, when undertaking renovations, have had to raise their house by a metre to comply with the DA orders.

Some have been told they needed to go through the DA process, at their own expense, for minor works such as a garden fence or a kitchen renovation.

The Mercury understands the effect on private certifiers has also been significant, given the loss in business.

Woonona resident Steve Byrnes said the aborted regime was an inconvenience.

He was told by the council that he would have to go through the full DA process, with fees, to renovate his kitchen.

"I was told the Codes SEPP didn't apply," he said.

"It was an inconvenience I didn't think would be necessary for the small job I planned to do."

He put the project on hold.

But, now the extra rules have been removed, he is ready to do the work.

The council spokesman said the flood studies contained the most up-to-date information the council had.