The draft plan shows new floodway and inundation overlays that could restrict development in areas such as Belfast Lough's edges, South Beach, Port Fairy west, East Beach and wharf.

It also uses records from the 1946 flood, considered a one-in-500-year event, other minor floods and two studies since 2008 to determine at-risk areas.

The council received 78 submissions to the draft plan, called the Port Fairy Structure Plan C69 amendment, earlier this year.

Council planning director Brett Davis said "a substantial number" of those submissions referred to the application of the flood and inundation overlay.

The town's north-east experienced what emergency services claimed was a "one-in-50-year flood" on Saturday, inundating roads, community facilities and some houses.

Port Fairy SES controller Steve McDowell told The Standard crews had collected data about the weekend's flood waters which could inform future flood planning.

"We saw some flooding that we weren't expecting ... the modelling was really accurate but there were some anomalies," Mr McDowell said.

Port Fairy resident Damian Gleeson, a candidate in this month's council election, is one resident opposing the overlays, particularly due to projected sea level rise.

Mr Gleeson said despite scenes of inundation this week the 1.2-metre sea level rise was a "separate issue" he wanted aligned with Warrnambool's 0.8-metre projections.

"The flood overlay will potentially devalue houses, which affects rates," he said, pointing out many home extensions could be kept to 20 square metres.

"It's going to affect all our planning."

Mr Gleeson said residents' insurance costs could also increase.

"Council needs to be aware of the devaluation of properties and the burden placed on residents," he said.

"There is no doubt we have to be environmentally concerned ... but to make this decision exclusively for Moyne concerns me."

Mr Gleeson wants the sea level rise reviewed every 20 years.

The council's Mr Davis said the sea level rise prediction was based on a state environment department's 2013 report for Moyne Shire that councillors adopted in 2018.

The Intergovernmental Panel on Climate Change predicted last year seas could rise up to 1.1 metres by 2100 if greenhouse gas emissions weren't curbed.

Mr Davis said insurers did not "only look at whether a property has a planning overlay applied or not", instead basing premiums on flood likelihood "taking into account all information available".

The council will consider the amendment again in early 2021 and decide whether to forward submissions to an independent planning panel.

Mr Davis said that panel would "ultimately" test the flood level and make recommendations to Victoria's Planning Minister to finalise the plan.

Have you signed up to The Standard's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in the south-west.