Otago Regional Transport Committee (ORTC) chairman Stephen Woodhead said the cycleway, which would cost $5 million to complete, could be one of the planned projects affected by an anticipated reduction in government transport spending in Otago.
Harbour Cycle Network (HCN) representatives said they would be upset if the cycleway lost funding and called on ORTC members to ensure it did not happen.
A Labour Party spokesman has suggested the region's transport funding could lose about $10 million during the next three years.
Public submissions on the ORTC's draft, $530 million, 2009-2012 programme close on May 1.
The programme includes $18 million worth of walking and cycling projects, the largest of which is a $5 million project to complete the Dunedin to Port Chalmers cycleway.
But the proposed spending is based on the previous government's transport priorities and the new government is not expected to make its funding announcement until May.
Mr Woodhead said the ORTC had been given a "general indication'' by the government but no final figures.
"We are not sure of the impact yet,'' Mr Woodhead said.
"Certainly there is a change in focus; a drive towards efficiency and productivity. The timing is unfortunate in relation to setting the land transport strategy.''
Labour Party transport spokesman Darren Hughes said he had an extract from government cabinet papers which had not been made public which showed national spending on local roads and state highways during the next three years would be reduced by $197 million.
The impact on each region would probably be "on a population basis'', Mr Hughes said.
Otago could expect to lose about $10 million.
It was unclear yet whether the changes would affect the planned Maia to Port Chalmers section of the cycleway, Mr Woodhead said.
But Minister of Transport Steven Joyce had "given an indication new cycleway, walkway and passenger-transport projects may not get funded'' which "would be extremely disappointing''.
Mr Woodhead called on the public to make their opinions known through the public submission process.
HCN and Chalmers Community Board member Nicola Bould was "very upset'' by the possible loss of funding.
"It would be incredibly frustrating if they suddenly turn around and say no,'' Ms Bould said.
The cycleway was important to improving cyclist safety and because of its amenity value.
"There have been numerous accidents on State Highway 88 and it's only a matter of time before there is a death. An unbelievable number of people use the existing section of the cycleway.''
HCN member Steve Walker said the group would be lobbying the Dunedin City Council and the ORTC to ensure the cycleway was completed.
A spokeswoman for Mr Joyce said the government policy statement on land transport funding would be announced ‘‘sometime during May'' and would come into effect on July 1.
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