The city council’s director of planning and infrastructure Leon Schultz said he did not envisage the disused livestock exchange being turned into an estate.

“The old saleyards is unlikely to be zoned for residential,” Mr Schultz said.

“We have a lot of land that is zoned as residential, I don’t believe we need to consider further rezoning.”

The fate of the yards, which hosted their final sale last year, is in limbo with the council undertaking an expressions of interest process.

Lawyers for Greenchip Recycling, south of the yards, had raised fears its client could be further encroached upon by housing with a change in zoning of the industrial site.

“The proposed redevelopment of the Wodonga saleyards and adjoining industrial land presents a further risk of encroachment of incompatible land uses to the Baranduda (industrial estate),” Russell Kennedy lawyers told a recent hearing into the city’s planning scheme.

The same lawyers had sought a change to the planning scheme with the inclusion of a formal buffer zone between housing areas and the recycling centre and the industrial estate.

Despite a recommendation from the planning panel to have buffer zones around Greenchip and the industrial estate, the council has rejected the move.

Mr Schultz said the council felt it was inappropriate for those changes to be adopted as part of a rejig of the planning scheme without a separate specific process.

“To impose a buffer without any warning I don’t think is a good thing to do,” he said.

Mr Schultz said if organisations such as Greenchip and North East Water, which has a treatment plant in the area, wanted buffer zones they would have to apply for them as the council would not initiate action.

“If they want those changes implemented we would believe the initiative is with them and they should make applications to us to consider those buffers, which must be supported by evidence be it wind modelling or odour assessment,” Mr Schultz said.

“We’ll continue discussions with North East Water, we have a very good relationship with them; with Greenchip we would leave it in the hands of them and their consultants if they wish to pursue the buffer distances.”

Greenchip Recycling boss Terry Corrigan said his firm would follow “due process” to pursue buffer zones, believing the council should have dealt with them in the recent planning review.

North East Water managing director Craig Heiner said his organisation had concerns about the protection of its assets from homes and conflicts in land use.

He said one of his plants at Benalla was a pilot case for Victoria for buffer modelling with prevailing winds crucial.

Mr Heiner said Mount Beauty’s treatment plant was close to homes but its impact was muted by a prevailing wind away from houses.