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The proposed provision would have allowed the proctor to issue a notice to clear rubbish to a student residence that had a significant rubbish issue.
A daily fine could be imposed up to a maximum amount where rubbish was not cleared in a reasonable timeframe.
It comes as a complaint was made to the Otago Regional Council about furniture and debris in the Water of Leith yesterday.
The university received submissions on the proposed changes in May.
In response, the university said it recognised rubbish continued to be an issue, particularly in North Dunedin.
However, after considering submissions on the issue, the university decided to remove the rubbish provisions.
It would continue to work with its partners in The Sophia Charter, including the Dunedin City Council, the Otago University Students’ Association (OUSA) and landlords.
Action was still needed to deal with rubbish dumping on private land, the response said.
Many submissions on the issue criticised the university for trying to police students’ private lives.
OUSA opposed the provision and called it a "serious overreach by the university, extending beyond their statutory powers as an academic institution".
Association president Michaela Waite-Harvey said OUSA was pleased student submissions were heeded in the process.
Meanwhile, a Dunedin resident, who asked not to be named, has made a complaint to the regional council about rubbish in the Water of Leith.
The issue of rubbish in the water in Leith Rd was ongoing, but yesterday it had been particularly bad, the resident said.
There were at least two sofas, a picnic table and an ‘‘enormous’’ amount of debris that appeared to be from parties, in the water.
"Most of the flats that back on to the river do not have a decent fence, so material is just spewing down the bank from backyard parties."
She said she had reported the rubbish to the regional council in the past and it had always sent someone to clean up.
A neighbour of a flat with rubbish behind it said some had spilled down the bank but the residents had cleaned up after themselves later in the morning.
Regional council compliance manager Tami Sargeant said it was a prosecutable offence to dispose of contaminants such as rubbish and large items in a waterway.
In yesterday morning’s case, proactive action had been taken by the offenders so no further action would be taken.