About 100 locals gathered at the Gipps Street address yesterday with Moyne Shire councillors and staff to vent anger at plans for the nine-metre-high home to be built on support pylons at the vacant riverfront block.

Moyne Shire Council is likely to decide in two weeks if it will allow a permit for the controversial development, which applicant John Mugavin insists will be his family home.

Locals made no attempt to hide their anger with some carrying placards .

The land was awarded to Mr Mugavin for free last year under an adverse possession claim made to the state's titles office.

The council unsuccessfully asked Premier and South West Coast MP Denis Napthine to order a review of the decision.

Mayor James Purcell told the crowd councillors were yet to decide on the permit but indicated his opposition, saying council was ready to fight the matter in the Victorian Civil and Administrative Tribunal (VCAT).

"The applicant said to me if we refused he would file it at VCAT," Cr Purcell said.

''If we make a decision that is appealed at VCAT we will always defend it. VCAT is nothing new to council.''

Mr Mugavin said he wanted to "build a family home for me and my family".

"By no means am I a big developer from Melbourne,'' he said.

"I'm not out to cause angst in the community. I just want to build a family home for myself and my family so we can live in Port Fairy .

"I've ensured it doesn't encroach on the salt marsh," he said, adding that he had been in six months of talks with council to draw up appropriate plans.

Moyne planning manager Michelle Grainger said Mr Mugavin had agreed to hand over the salt marsh part of the land to council for fisherman to access.

Asked about the nine-metre height of the house Ms Grainger said "it does not comply" with planning rules.

Mr Mugavin said the home would be lower than neighbouring property and warned the offer to hand back the salt marsh would be scrapped if the matter went to VCAT.

Residents also raised questions about visual impact from the home and the risk of limiting future reconstruction work on the Moyne River bridge.

Rex Grady received applause after urging councillors to "use our ratepayer funds to fight it".

CMA water program manager Brad Henderson defended the authority's decision not to object, saying "the CMA examines on a case by case basis".

Port Fairy councillor Mick Wolfe said there was a strong sense of community ownership over the land.

"It's sensitive because it's been used by people and their parents and their parents fishing,'' he said.

''I think it's probably the most significant block of land in town."

s.mccomish@fairfaxmedia.com.au