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More than 800 people gathered on the lakefront on Monday, some of them highly intoxicated. Police said about 600 people breached the 10pm liquor ban, and left a trail of rubbish.
Queenstown Lakes district Mayor Jim Boult said the behaviour of some party-goers was unacceptable and could lead to an extension of the annual New Year liquor ban.
''I am really disappointed. It is another nail in the coffin [for] allowing alcohol consumption in public areas in town during any holiday period.
''We have a liquor ban over the New Year period but now it looks like we will have to extend it to Christmas.''
Mr Boult yesterday morning spoke to the Otago Lakes Central Area Commander, Inspector Olaf Jensen, and planned to raise the issue with council in the new year.
Queenstown resident Kirsty Tennent, who had a couple of beers on the beach on Monday, said a ban was not the answer.
She left the beach about 8.30pm, and, while she admitted it had the potential to get rowdy, her impression was that all party-goers were having a ''fabulous time'' celebrating Christmas.
Mr Boult agreed a ban would affect all residents and visitors.
''The sad part is that a few people ruin it for everybody else and you end up with liquor bans that affect people who just want to have a couple of quiet drinks and behave themselves.''
Insp Jensen said he would support a ban - but any ruling was a council decision.
''There were very high levels of intoxication which we cannot control because it is not a licensed area. That is the risk we have around the levels of intoxication and the disorderly behaviour which is likely to follow.''
Some women at the lakefront drinking session had become ''vulnerable because of their levels of intoxication''.
There were no arrests.
''Sometimes when you have to make arrests that can escalate the situation,'' he said.
Sergeant Keith Newell described the level of drunkenness on Christmas Day as ''alarming'' and some people were ''unable to take care of themselves''.
The New Year liquor ban comes into effect today and continues until January 6.
DowntownQT general manager Steve Wilde said a total ban was not ideal but the council had few choices.
He blamed party-goers and said any ban was ''in their hands''.
On Christmas Eve, police dealt with revellers as they left pubs at midnight.
A police media spokeswoman described it as ''chaos'' and said police had confiscated alcohol and issued warnings.