A former gasworks tar pit in South Dunedin has jumped into the top ten list of the country's most contaminated sites.
Dunedin City council is now bidding for Government help with the clean-up.
The 150-year old tar pit off Hillside Road contains about one million litres of tar and contaminated water, and would be a risk to human health in an earthquake or if leaked or overflowed.
Local archaeologist Peter Petchey said the tank was built in about 1862 as the underground part of a coal gas holder, and first became a pit for tar in the 1880s.
The council's investigations so far have been enough to put the site into the national top 10 priority list for contamination clean ups run by the Ministry for the Environment, after several other clean-ups were completed.
Dunedin City Council investigations have found the top of the tank is letting in rainwater, so it is having the contaminated water pumped out every three months at a cost of $10,000 each time.
The coal tar is full of chemicals which are bad for human health and aquatic life, some of which are carcinogenic.
The council feared it might be leaking into the soil or sewerage system, though council property officer Tim Buchanan said that did not seem to be happening.
"If the tank had an imperfection, or a hole, then it could be leaking out into the surrounding areas, maybe chasing down the stormwater drain," Mr Buchanan said.
"But given that we've got a water level in the tank that's higher than the ground level, it would indicate we have a tank which is holding the water.".
Even if there is no immediate danger, an earthquake or accident could be bad news given the amount of tar at the site.
Ministry for the Environment operations manager Mike Mendonca said the top 10 sites were the most risky it knew about as notified by regional councils, though there could be others.
Mr Mendonca said the gasworks site now would be a priority. The government typically pays half the cost of investigations and clean ups.
But he said the ministry would take a cautious approach and that might not lead to a full clean-up.
"With things like old landfills, there are often thousands or sometimes millions of cubic metres of waste material, and sometimes in trying to clean up those sites you can create environmental effects that are worse," he said.
The ministry said it was expecting to get an application for the Dunedin Gasworks by the end of September.