Under the new regional library agreement with Corangamite Shire Council, Moyne has chosen to establish its library management hub in Mortlake and the meeting room will become the new headquarters.

The council has touted the move as a win for Mortlake, creating three new jobs in the town, but locals said they were devastated to lose their only properly equipped community room.

The Mortlake Community Development Committee held the lease over the room, organising access at least a dozen local groups to hold their meetings. At the monthly council meeting on Tuesday, committee president and former councillor Kelvin Goodall asked whether the human cost of the decision had been weighed against the savings to council's bottom line.

"We want to know the reason to bring in this draconian restriction," he said.

The council conceded cost was the reason the room was being repurposed, with director of community and corporate services David Rae saying it "wasn't cost effective" to build a separate facility to house the new library hub.

Mr Goodall said the decision had been made without any meaningful engagement from the council.

"MCDC is appalled by the way consultation was handled by the shire," he said.

"MCDC has acted in good faith representing the community and council's actions have damaged the trust in the community and its reputation as an honest broker."

Mayor Ian Smith said he understood locals were upset, but argued council would find an suitable alternative.

"While the loss of the room for community use was a difficult decision to make - it came down to what was the best use of ratepayers money and using a facility council already owns and that is connected to the library made the most sense," he said.

"Council is committed to working with community groups impacted by this change to help them find a new meeting space as required," he said.

Mortlake local Jillian Clingan said that was wishful thinking.

"It's not realistic at all there is no other room in Mortlake that is equivalent: a centrally located modern building with easy access for people of all abilities available at all hours," she said.

Ms Clingan belongs to the evening branch of the local CWA and is secretary of the Mortlake Historical society, both of which used the community room. She said she feared the community would be "fobbed off with something vastly inferior".

"The whole thing's been rather insulting really. There's been no community consultation on this. It's obviously to save money, but it's not going to save the Mortlake community," Ms Clingan said.

She said the MCDC had contributed $50,000 to the construction of the community centre and the CWA had provided the round seat out the front of the building and it felt like that was being "ripped away" from them.

"The council don't seem to understand or care about Mortlake," she said.

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