The same goes for the heritage-listed Newcastle Ocean Baths pavilion.

Last week Newcastle councillors agreed to call for expressions of interest for both Newcastle and Merewether Ocean Baths pavilions.

It comes after the council received an unsolicited proposal from restaurateur Neil Slater in March to develop the Merewether site.

The council did have plans for a $1.3 million overhaul but lost nearly $1 million in funding after the federal government slashed its community grants scheme in November last year.

The Merewether plans included a new pavilion and shade shelters, seating and disabled access.

Councillor Brad Luke threw his support behind the calls for redevelopment, particularly the Merewether site.

"At the moment it's an absolute mess . . . many people wouldn't let their kids in there," he said.

Cr Therese Doyle said she hoped the size and scale of any new development was in keeping with the character of Merewether.

Cr Michael Osborne also raised concerns about the size of any new developments and potentially losing car parks.

However, Cr Nuatali Nelmes said the footprint open to expressions of interest was similar to the space earmarked by the council to redevelop with the federal grant money.

She said the space marked for development also had the backing of the Merewether community reference group.