In a stomach-churning twist to the suburbs worsening erosion problem, huge swells have exposed an old tip on the shoreline, just north of Corroba Oval.

Residents were stunned and dismayed at the revelations on Friday, warning the garbage would eventually start washing up further south down the beach, between the flags.

Read more: Childcare centre at risk as the surf consumes Stockton coastline

People used to put everything and anything at the tip, said Stockton Surf Life Saving Club life member Jimmy Newton

I dont know anywhere else in Australia where it could be acceptable to have a tip washing into the sea.

When contacted by the Newcastle Herald on Friday afternoon, Newcastle council, the NSW Environment Protection Authority (EPA) and Parliamentary Secretary for the Hunter Scot MacDonald all said they were unaware of the problem.

Mr MacDonald then contacted Environment Minister Gabrielle Upton, who ordered the EPA to carry out an urgent inspection of the site.

A council spokesperson declined to comment, saying the land was largely owned by Hunter Water.

Hunter Water also sent an officer to the scene, which is close to its former Stockton Wastewater Treatment Plant.

Large surf swells in recent days has led to significant erosion of the dunes near our land at the former Stockton Wastewater Treatment Plant site, a spokesperson said.

We were notified by council on Friday afternoon that the erosion had revealed asbestos material on, or near, our land.

Our immediate focus is to make the site safe. We currently have an environmental officer inspecting the site, which will inform us of what precautions we need to initially take to maintain public safety. We will also be working on a longer term plan for remediating the site.

Rubbished was littered along about 150 metres of the shoreline north of Meredith Street, with items scattered and half-buried in the sand including a pair of mens trousers, Embassy baby powder, batteries and Old Spice after-shave lotion. Several of the bottles appeared to be several decades old.

Much of the rubbish was compressed within an embankment several metres deep with what appeared to be asbestos jutting out.

Member for Newcastle Tim Crakanthorp expressed grave concerns for the Stockton community and demanded that Minister Upton inspect the consequences of the erosion for herself.

Read more: Cost poses an issue to Stockton erosion plan

I have asked the Minister to visit Stockton and sit down with all stakeholders to find a way to ensure the residents and infrastructure are protected from the immediate threat of coastal erosion and work towards providing security for the community into the future, he said.

He argued Stockton should categorized as an erosion hotspot to qualify for additional funding.

At present the NSW government is failing the Stockton community, he said.

A number of long-term Stockton residents recalled visiting the tip, and believed it closed during the 1970s.

Louise Craig, 60, remembered going on weekend trips there with her parents in the 1960s.

"Whatever we couldn't fit into our bin, and that was a lot because we had small bins and big families, would go to that tip," she said.

"The garbage collection would go there as well. It's shocking to think of what would be washing into the water I imagine there would be asbestos and a host of other dangerous things.

"I hate to think of it being washed into the water and then washing up along the beach."

Comment: Building another sea wall could have adverse consequences

Stockton Community Action Group member Keith Craig picked through the rubbish on Friday, and said it appeared water had washed over the dump nearly to Corroba Oval.

Theres asbestos there, its quite ugly, he said.

We're concerned about the health issues there and its something council really need to look into urgently.

From the vicinity of the old dump south to Barrie Crescent, more than 20 World War Two-era tank traps have also been uncovered by the retreating sands.

Council warned the traps may not be visible above the waterline at high tide and plans to close a number of beach access paths.

The public is asked to stay away from the foreshore around the Mitchell Street seawall because it has been left unstable north of Barrie Crescent, a spokesperson said. A long ledge created by the erosion has been fenced off with hessian.