Residents of Franz Josef have expressed concerns about the Westland District Council's plan for dealing with the risk of an Alpine Fault earthquake.
GNS Science says the Alpine Fault, which runs through the tourist village in South Westland, has ruptured four times in the past 900 years, each time producing an earthquake of about magnitude 8.
It said the fault had a high probability of erupting again in the next 50 years.
The Westland District Council's proposed changes have already proven contentious.
The council wants a buffer of up to 130 metres, where existing businesses can continue to operatre, but cannot expand or develop any further.
'Need to develop an alternative'
Independent commissioners have spent the day hearing submissions from the community on the Westland District Council's proposal.
Residents of Franz Josef said they would be 'hamstrung' and the town centre will become derelict if the proposal goes ahead.
About 400 people live in the village, which is largely dependent on tourists, with the Franz Josef Glacier among the main attractions.
The owner of the local supermarket, Mark Williams, said he had been trying to expand his site for four years, but had been stopped while this whole plan was in process.
He said people should be compensated, and helped to move.
The head of the Franz Josef Business Association, Craig Rankin, said if businesses could not develop, property owners would not be able to sell, the bank will not lend on repairs, and the town will become derelict.
However, one local developer said shifting the tourist township north would move it away from the risks posed by fault lines and rivers.
Gavin Molloy said he set up a subdivision north of the village, with a view to moving the entire township to a safer place.
"It's a vision of mine that identified many issues facing Franz Josef over many years: the need to develop an alternative for people to invest in an area that's not exposed to the natural hazards that Franz Josef is."
Members of the community can make submissions on the plan today and tomorrow, at the Scenic Hotel.