Southland District Council Mayor Frana Cardno said the Te Anau ambulance service had received "Hotspot" funding from ACC, which St John was planning on using to place the full-time, paid officer in the town, a decision the town's doctors and ambulance volunteers did not support.
"Volunteer ambulance drivers are at risk of burning out and it seems St John does not value volunteers who, in Te Anau, have a lot of expertise, knowledge and experience and who have saved many lives.
"One size does not fit all," she said.
Dr Graham said the situation in Te Anau was somewhat unique - in the 10 years he had lived in the community "anyone who has needed an ambulance has got one".
"That's not always the case in other isolated areas.
"A single, paid officer would destabilise the service and it is not addressing the problem.
"There is the potential to lose a lot of people.
"The officer would not be available after hours so the volunteers would still be doing it, without any recompense.
"The present system is functioning well here with certain strains on it and those strains would be helped by funding the volunteers.
"It would encourage people to stay and would help with recruitment," Dr Graham said.
There were up to 16 volunteers in the Te Anau basin available for ambulance duties, including helicopter pilots who routinely got call outs to Stewart Island, some of those volunteers completing up to 700 helicopter jobs each.
Te Anau had proposed volunteers received a "flat rate" of $20 an hour for callout at any time. The rate would not cover training or courses.
Dr Graham said many volunteers in the Fiordland area arranged their work schedule to be available for their rostered ambulance days.
"They don't get any reimbursement because they are not officially working.
"We don't think that's fair and the volunteers don't think it's fair."
St John was based on the concept of "volunteerism" but the proposal did not change the fact the bulk of the volunteers' time was spent on training, which they would not be paid for.
The group had proposed setting up a trust to pay the volunteers so St John would not have to be involved in an employer/employee relationship and ACC had told the group it was happy for the funding to be used that way, he said.
"St John has an agenda of using full-time paid people only as much as possible."
The full-time paid officer model was already being used in Wanaka and there were "problems" there, he said.
In Te Anau, the battle was destabilising the volunteers when their focus should be "on training and helping people in need".
"We don't want a paid person unless the volunteers are paid as well.
"In my opinion what St John is proposing is a flawed model and not appropriate for low density populated areas with high tourism which are isolated," Dr Graham said.