Queanbeyan City Council has put its controversial backdated ratepayer bills on hold and asked the New South Wales Government to write off the debt.
The council recently issued backdated bills and refunds after an audit of its property database found a significant shortfall.
The audit found 5 per cent of Queanbeyan ratepayers were incorrectly billed, including more than 2,000 ratepayers who were owed a refund.
About 800 ratepayers were undercharged and sent extra bills of up to $94,000.
Most of the ratepayers issued with bills were businesses and community organisations, and some were concerned they would be forced to close.
At a council meeting on Wednesday night, the council officially put the August payment deadline on hold.
Mayor Tim Overall called for an urgent meeting with the New South Wales Local Government Minister Paul Toole, to discuss writing off the outstanding rates.
"(It) would allow council to write-off, or waive retrospective charges," he said.
But Councillor Overall said a special amendment to the Local Government Act was needed.
"Unfortunately the current Local Government Act is quite prescriptive on what council can and can't do," he said.
"At the moment council is unable to legally write off the rates and charges."
The council also moved to issue refunds to the property owners found to have overpaid rates.