Waitaki Mayor Gary Kircher said he expected the decision to go back to the drawing board for the proposed amalgamation of the gallery, North Otago Museum and the Waitaki District Archives would be "a bit frustrating for some", but others at the council saw the opportunities presented by the inaugural $1billion a year provincial growth fund the Government had initiated.
"We shouldn't be pushing along because that's what's been planned for the last seven years, because things change. You need to be adaptable," Mr Kircher said.
"And we've got just such fantastic opportunities in front of us we've got to grab them with both hands and make the most of them - and that means spending some time going back to the drawing board on this particular one.
"If you look at Dunedin, they have the vision that they have developed for their harbour - the community has come up with that - [Regional Economic Development Minister] Shane Jones has been briefed on that and what seemed pretty fanciful not very long ago, now seems like it could very much become a reality. It's just the change that that makes."
The Waitaki council had committed $1.9million towards the project, had secured $1.6million in external funding, and last year said it expected to secure a further $2.5million in external funding, "but the provincial growth fund, we're talking the potential for much, much more".
Mr Kircher said "a lot of the work" already done could be utilised if the three facilities were now kept separate.
The project would continue, but it was now likely to take "a different form" and include other elements.
After the direction was set at a March 12 councillors' workshop, the council had spoken to major funders on Thursday, and they remained positive.
A meeting within the next two months would identify preferred options and those funding bodies that had committed to the project were "waiting eagerly to see what we are proposing".
The project also faced financial concerns, as the operating costs were expected to come in higher than anticipated - operating costs amounted to a 1% rates rise in the third year of the draft long-term plan due for public consultation this autumn.
