Until now, the council has maintained it would not be involved in the legal action.

But it has now received "confidential" legal advice on the potential risks of choosing to opt out.

Katherine, together with Oakey and Williamtown, are suing Defence for compensation over PFAS contamination and a subsequent fall in property values.

Shine Lawyers signed up hundreds of Katherine people last year to take on the class action.

But rather than actively joining the legal action, residents have to actively remove themselves if they don't want to take part in the action, anticipated to hit court later this year.

The decision will be put to elected council members tonight.

"If Katherine Town Council does not remain in the class action, KTC will have no legal entitlement to require Defence to fix any issues that may arise and will be relying on its relationship with Defence to ensure issues are remedied," a KTC report, released yesterday, states.

Defence has put aside more than $50 million to prepare for the court fight.

And in Katherine's case, Shine Lawyers has secured funding support from IMF Bentham which means it can take the action on a no win, no fee basis.

"KTC will not be individually responsible for legal costs associated with bringing the class action and will not have to provide any upfront legal fees," the report states.

"Katherine Town Council is committed and confident in the continuance of its strong working relationship with Defence."

Katherine property owners have until July 19 to opt out.

These are Katherine residents who own, or have owned a property in the investigation area (basically Katherine township) as at November 23, 2016.

If they want no part in the class action, they must fill out an opt out form, also available though the Shine Lawyers website.

The Special Meeting of Council is open to the public and was advertised for the first time yesterday on the council's social media channels.

The meeting starts at 5.30pm at the Katherine Town Council chambers.

The agenda can be read here.

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