At a Southland District Council meeting this morning residents of the coastal town appealed to councillors to save the waterfront road, which was temporarily closed two years ago.
A report to councillors said the road had been eroding since the 1930s and rock protection works put in two years ago on part of the road had not been successful.
The report recommended strengthening the protection works to protect foreshore properties, at a cost of about $200,000, but closing the road permanently.
It said that compared with at least $700,000 required to restore or reopen the road.
After presentations and discussions taking one and a half hours councillors said they were uncomfortable making the decision without more information.
They agreed to visit the site together and deferred the decision to their next meeting in November.
A 2015 report from crown institute NIWA showed there were no simple long-term options to protect the foreshore road, but many Colac Bay residents said the council's hands-off approach would leave the town to die.
The residents said the tourist trade relied on foreshore access and businesses were closing as visitors stopped coming.
They said the beach had a significant and popular surf break which was becoming dangerous to access.