Benalla Migrant Camp chair Sabine Smyth called the council planning and development committee's decision a "drastic move" that would close off much of the precinct to the public and hinder long-term plans to conserve the state heritage listed site.

But the groups concerned - Benalla Theatre Company, Gliding Club of Victoria and the Balloon Association of Victoria - provided evidence they been given the buildings years ago and remained committed to their upkeep.

Wednesday's meeting received seven written submissions that opposed gifting the huts while 11 people spoke at the people, including representatives of the relevant organisations.

The proposal had come before the full council last month but was deferred following public feedback.

In her submission, Mrs Smyth asked the council to defer an ownership decision further until the financial and legal implications, particularly regarding the council's conservation management plan, had been fully considered.

"In the past, many council decisions were made with a short-term view and to the detriment of heritage buildings," she said.

"Please do not let this be another short-term, detrimental decision."

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After the meeting, Mrs Smyth told The Border Mail the result showed a lack of vision for the future and a lack of effort to negotiate long-term leasing arrangements or similar with the affected groups.

"Our point of view is when you look at the documentation, it is not cut and dried, the original gifting was basically not ratified by council, the community was never consulted about it," she said.

Benalla Migrant Camp members were now grappling with this week's decision and how it might affect their exhibition in another of the huts.

"We just need to digest it and then work out what our next move is because the interpretation of that history and getting it out is still our main thing, and how we're going to do this now is another thing," Mrs Smyth said.

Benalla Council chief executive Dom Testoni said an original gifting appeared to take place under the former Delatite Council nearly 20 years ago.

"Council records at that time are just not available to underpin that particular decision by a council, but the letters (to the organisations) clearly state from the officers of the council that the gifting did take place," he said.

"It's good to see that it's moving forward, I think the question of ownership has been dragging on a little bit."

Mr Testoni said the councillors had been reassured by public comments made by the user groups at the meeting.

"They definitely committed to working not only with what was being adopted under the management plan, quite a number of them are already working with Heritage Victoria on a number of issues," he said.

"The simple fact that they've maintained those buildings over the past two decades would demonstrate their commitment to the particular area."

Benalla Theatre Company secretary Emily Watt said her group was given ownership of huts 63 and 64 in 2002, when they were in a derelict condition and had spent more than $100,000 on replacing flooring, reroofing, removing asbestos and adding heating, cooling and hot water.

"Without us, the huts would not be standing but we're wanting to maintain them and keep everything as is," she said.

Mrs Watt said the theatre company used the huts for rehearsals, concerts, performances, meetings, set construction, costume making, storage, workshops and social events, as well as allowing use by other community groups.

Border historian Bruce Pennay, whose research helped the migrant camp achieve heritage listing, said the council committee's disappointing decision ignored why the site was placed on the state heritage list in 2016.

"These huts are one of only two sets of rare buildings that relate directly to the influx of a huge number of non-British migrants in the post-war years," he said. "The other set is at Bonegilla.

"The proposed gifting will make it more difficult to find space for the migrant story.

"Benalla Council has the responsibility for conserving and managing the place.

"Its first act since the listing is not to erect street signage, or site signage, or produce an interpretive pamphlet to attract visitors, but instead to shut doors on the visitors."

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