There were 117 submissions to the building of 30 tiny houses for group accommodation in Peterborough, with 114 of those against the proposal.

However, councillors said many community members were in support of the proposal but felt too afraid to speak out.

"As a councillor I treat each application on its merits and do the due diligence to go through the process regardless of what personally I may think," deputy mayor Jo Beard said.

"There has been multiple, multiple phone calls from people calling in and actually saying they're supportive of the project but have been in fear of actually putting that into writing.

"So we do take our decisions seriously and on the basis of the whole community."

The permit was granted approval on Tuesday night with 55 added conditions.

The development has a Cultural Heritage Management Plan approved by Aboriginal Victoria and has been signed off by numerous authorities including DEWLP, CCMA, CFA, Department of Transport and Powercor.

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The decision took one-and-a-half hours after 14 people spoke at the council meeting.

Among them was Zoe Wilkinson, a young Corangamite Shire resident and regular visitor to Peterborough.

"It is important to me that the shire makes ethical decisions and commits to protecting the environment," she said.

"The flock of birds of all different species covering the estuary is always the first thing I look at as I drive into town and the last thing I watch as I drive away.

"I am worried these birds will not return to the area after the proposed accommodation is constructed.

"The zoning of this land as rural conservation has protected the estuary and the animals that call it home, allowing them to thrive.

"Globally the destruction of natural environments is occurring at horrifying speed. I believe that we as a shire have a moral duty to very carefully consider any proposal which will contribute to this.

"In 50 years will we be grateful for this commercial development in Peterborough, or for the protection of an ecosystem which creates a home for native fauna and contributes to preserving earth's natural environment?"

The development will include 30 accommodation units, a reception building, shared activity building, playground, boardwalks and star gazing deck.

The it will be set back 100 metres from the edge of the estuary.

Opponents had urged councillors to consider whether the development would set a precedent for overdevelopment in the area and change the rural characteristic of the area.

Many also highlighted the upgrades happening at the neighbouring Peterborough Airport that could see visitors flown in and out of the Great Ocean Road from metropolitan airports.

Sustainable Peterborough Alliance lead Christine Norton urged councillors to think of the site in the same way they did Lake Gnotuk when they rejected a permit to build on the crater lake's edge last year.

Mayor Ruth Gstrein said she saw it as a "light touch development".

"This has been a very difficult decision for councillors," she said.

"I believe the conditions will mitigate many of the concerns you've listed.

"At 100 per cent occupancy there will only be 60 additional people on this site at one time.

"I don't think it can be compared with high visitation sites like Venice or the Gold Coast."

The council meeting and reports can be viewed here.

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