The association requested $85,000 for upgrades to the Deviot Hall, which is owned and managed by the association.

The hall is used regularly for markets and fund-raising events.

The association suggested upgrades would allow it to increase the scope and number of activities held in the Deviot Road building.

It said the funding would also be used to install disabled toilets.

Many councillors yesterday expressed concerns it would be inappropriate for the council to allocate funds to a private group.

Cr Peter Kearney, who defended the Deviot Community Association's work, amended the original motion with the suggestion the grant be subject to changes to the Deviot Hall Association's constitution.

He said changes would ensure the hall remained in community hands.

The council continued to debate back and forth with amendments to the original motion, one amendment suggesting the grant be reduced to $20,000.

Cr Kearney and Cr Peter Kaye labelled the reduction "insulting".

Councillors eventually agreed on a $50,000 grant to the association, subject to the Deviot Community Association receiving equal funding from the Tasmanian Community Fund.

Mayor Barry Easther, Deputy Mayor Christina Holmdahl and councillors John Watson and Tim Woinarski voted against the allocation of funds.