The council yesterday rejected 7-4 a proposal to commit $30,000 annually to a funding pool for the project's track maintenance over five years from 2014.

The refusal puts Northern Tasmania Development in a predicament as it is now forced to find the money in its own budget.

The project will compromise 18 kilometres of track at Hollyback, 43km at the Blue Tier and 35km at Derby.

It will be funded by the federal government, which has committed $2.4 million, state sources, and the Break O'Day and Dorset councils.

Regional Development Australia has chipped in $800,000 to fund the Hollybank track's construction.

Launceston general manager Robert Dobrzynski said the council had already committed $94,334 in in-kind support to administer track construction, which some aldermen argued symbolised a cash contribution as it removed council officers from other projects.

Mr Dobrzynski warned aldermen that a cash funding rejection would be seen by neighbouring councils as a bad- will gesture.

Alderman Rosemary Armitage said that other councils were lax in financially supporting Launceston's regional facilities.

Alderman Jim Cox criticised NTD's handling of the project, which he said had "more twists and turns than a mountain bike track".

Alderman Rob Soward believed the project's economic benefits to Launceston had been vastly overstated - sceptical of projections of $17 million additional spending in the region each year from up to 21,000 visitors, and the creation of up to 100 ongoing full-time jobs.

It is estimated that NTD may have to pay annual maintenance costs of between $18,000 and $27,000 for the Hollybank track each year.