Cr Geoff Dingle said that a Medowie master plan due to go before the council within months highlights the need for a mixture of commercial and higher density residential land close to the town centre.

"This [approval] provides an optional circulation road around the Medowie commercial area but more importantly opens up council land in support of a proposal to rezone and subdivide council owned land."

But Cr Dingle was critical of the road funding source.

"The cost to build the extension will be over $1 million, with $600,000 coming from road rehabilitation funds," he said.

"I would argue that our community cannot afford to hand over that amount of money from rehabilitation funding when we have other Medowie roads ... in desperate need of repair.

"I believe we should be contributing the $600,000 from the council's property development funding portfolio," Cr Dingle said.