The cycleway, connecting Palmerston, Dunback, Macraes and Middlemarch, was proposed three years ago when the Government sought proposals as part of a national cycleways strategy.
However, it missed out on government funding in favour of the Alps to Ocean (A2O) cycleway from Mt Cook to Oamaru.
Mr Familton said the views from the proposed cycleway on both the Strath Taieri side and from the Macraes to Palmerston side of the route, were outstanding and the community would benefit from the visiting cyclists.
Waitaki Mayor Gary Kircher told the meeting a Palmerston to Middlemarch cycleway could be supported ''in principle'', but the A2O cycleway would have to be completed first.
One option was for the cycleway to be ''on road'' and then progressively moved off the road, Mr Kircher said.
The Alps to Ocean cycleway was now offroad between Mt Cook and Bog Roy, near Omarama, with the remainder of the route to Oamaru progressively moved offroad as finance allowed.
Initial plans to use the former Dunback railway formation for a cycleway, considered three years ago, were not supported by all landowners along the route.
Waitaki district councillor for the Waihemo ward, Kathy Dennison, said a combined committee from the Palmerston Business Group, the Waihemo Community Board and the Waitaki District Council could be set up to investigate the cycleway proposals.
