The "Loo with a View" would offer sweeping coastal views while also addressing the lack of public amenities at the existing lookout.

Waratah-Wynyard Council narrowly knocked back the project in August 2019 only to greenlight the development of a business case last month.

Councillor Andrea Courtney voted against the business case and said the municipality could "do better" than "bringing tourists here on a toilet".

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"I don't want to be iconic for a dunny. I'm a bit uncomfortable with that," she said.

"It's a bit lacking in vision for the area and we've got heaps more to offer."

Cr Courtney also wondered why the council was considering spending money on a tourism attraction given "we don't know when the tourists are coming again" and other communities such as Yolla were in dire need of toilets.

"I would rather have money spent on infrastructure that benefits the community immediately," she said.

The Loo with a View concept ranked highly for its uniqueness and "WOW factor" in the 2020 Reimagining our Regions project, which was led by the Office of the Coordinator General in partnership with Tourism Tasmania.

Waratah-Wynyard mayor Robby Walsh said the idea was brought back to the council because of that report and the fact building the loo would likely be covered by a government grant.

"We're looking to provide good facilities, good amenities for the public in our municipality and this is just another one of those with a very iconic take," he said.

"There's was a lot of debate around the table about the cost of maintaining it around the year but we're also building new toilets before Kymmies."

Cr Walsh has long supported the Loo with a View and said it would be a "major attraction" not a "mark against our popularity".

He said having public toilets at Table Cape was an "absolute necessity" given the popularity of the lighthouse tours and Tulip festival.

"It's absolutely an essential service we need to provide. The area lack such a facility and if we can make one that's a star attraction, let's be known for it," Cr Walsh said.

Councillor Darren Fairbrother agreed Table Cape needed toilets but voted against the business case because he questioned whether the additional expense of a Loo with a View was "good value".

He said it didn't matter that the project might be funded by a government grant because "at the end of the day that still comes from the taxpayer".

"Surely Table Cape and the lighthouse perhaps are tourist icons in their own right without putting a toilet up there to be another competing tourist icon," he said.

The head of regional tourism body West by Northwest, Tom Wootton, did not buy concerns that the project would damage the reputation of region.

"To suggest that one 'famous dunny' would overshadow the broader appeal of Table Cape is to grossly underestimate its current and future potential," Mr Wootton said.

"I imagine there was a time when Hobartians were concerned about being famous for a museum about sex and death - but that seems to have played out okay."

Mr Wootton welcomed the council's "outside the box" approach of providing amenities while providing "a unique element of interest for tourists".

"Table Cape represents a significant tourism opportunity for the entire region, with a range of business already in operation and more on the way," he said.

"Along with the relatively new Table House Farm and the internationally renowned tulip festival, there is also an exciting new cellar door under development called Alchymia Distillery."