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The landfills, presumed to be capped in the 1970s, have spilled waste on to the beach below and now work will be undertaken to determine the size and level of contamination at the coast at the intersection of Beach and Awamoa Central Rds.
Waitaki Mayor Gary Kircher said the discovery was "disappointing''.
"It's just the way things used to be done. It was probably known about at the time and just covered over - and now we've inherited it. Not that good kind of inheritance, but we just have to get on and deal to it.''
The coastal Hampden landfill, an official landfill closed decades ago, had already been moved in part, but the council would eventually have to move "the whole thing'' eventually.
Recreation manager Erik van der Spek said the council, through the Otago Regional Council, had applied for $21,351 in government funding for site investigation and the development of a management plan.
The two adjacent sites were discovered 18 months ago by "someone down on the beach''.
A 37-page report - "Beach Road Closed Landfills Management Plan'' - prepared for the council in September shows a preliminary site investigation conducted by regional council staff found "landfill 1'' was the more contaminated of the two side-by-side former dumps.
At landfill 1, arsenic, copper, zinc and lead were found.
"The waste is exposed on the cliff face but no wastes have been found to be strewn across the beach,'' the report says.