NSW Local Government Minister Shelley Hancock this week announced she would be taking submissions on the demerger of the shire which was formed through the amalgamation of Tumbarumba and Tumut councils in 2016.

The process involves Mrs Hancock considering submissions before formally referring the issue to the Local Government Boundaries Commission, for an independent assessment.

The commission would then report back to the minister before a final decision on a break-up.

The Save Tumbarumba Shire group has long sought a demerger and its spokesman Neil Hamilton says Mrs Hancock's move "is clearly a step in the right direction".

"The clear reality is this should never have happened and we've now got the opportunity to demonstrate that in a formal case," Dr Hamilton said.

He expects the Office of Local Government to be flooded with pleas to split.

"There were 600 to 700 submissions to the boundaries commission when the merger happened and things are a lot worse than that now and I can guess you could get 700 to 800," Dr Hamilton said.

He believes Snowy Valleys Council is unviable and will need an administrator in 12 months because of its financial situation.

The council issued a statement in response to the minister's action, reaffirming its opposition to a demerger.

"We will not be providing ongoing commentary during this process," it concluded.

Member for Albury Justin Clancy arranged a meeting at Tumbarumba on October 29 between Mrs Hancock and Dr Hamilton's group.

Mr Clancy said it showed the depth of concern.

He hailed the review, after a petition to Mrs Hancock from Tumbarumba.

"Allowing this opportunity for the community to voice their concerns is an important step," Mr Clancy said.

He declined to say if he backed a demerger, saying he "wouldn't want to pre-empt any recommendation that the boundaries commission would be making".