Katherine Town Council representatives held a meeting with sporting user groups on Tuesday to try and find a way to rein in rising costs on the project.

It had been hoped the issue would be resolved at tonight's council meeting, but a report will now be given to the council at its December 10 meeting.

Some sporting clubs have expressed fears about the delay meaning actual works may impact on the dry season competitions next year.

The demolition of the pavilion and ovals upgrade at the Katherine Sportsgrounds were placed on hold back in August because of a blowout in costs.

Council voted to bring the sportsground project to a temporary halt after it was asked to contribute a further $1.6 million to the now $7.13 million project.

At that same meeting, council had agreed to divert $1.5m from the CBD upgrade to finance its long delayed hot springs project.

When the NT Government support for the sportsground upgrade was first announced it was costed at $4.4m.

A further $200,000 was promised by the Federal Government and council agreed to spend $200,000 from its own reserves to fix the No. 2 oval after the costs rose to $5.5m.

Now council wants a rethink.

"Being $1.6 million over budget... when we have made statements about our responsibility as a council to the community, we already have other expenditures and I am hesitant to invest more of our reserves into this," Alderman Peter Gazey said back in August.

The sportsgrounds cost blowout comes at a time the council has many other expenditures - including fixing the delay-plagued hot springs project and opening a new $40 million rubbish tip.

The Don Dale pavilion, built in the late 1980's, was slated for demolition in October, making way for a new multi-functional facility.

Sportsground users were given their first glimpse of what the new facility would look like in May of this year, and were told by the architects in charge of the design, the original building "was not worth saving".

The upgrade plans came almost a year after Katherine received $6.4 million from the NT Government to improve Katherine's sporting and entertainment facilities, which included upgrading the Showgrounds.

And Katherine MLA Sandra Nelson promised $250,000 to transform the pavilion into a community centre as part of her 2016 election campaign.

Back in August, Alderman John Zelley called for the plan to be sent back to the architects to re-design a building "better fit for purpose" within the council's means.

"I too am concerned about the $1.6 million over cost," he said.

"It will come out of reserves... it will hurt us down the track.

"We are not in a financial spot as a council to be spending extra on this facility, lets trim it back and get it closer to the money we have."

Hames Sharley Architects was awarded the contract for the design and consultation work earlier this year at a cost of almost $300,000.

Following a string of meetings with key sport groups, the architects found there were issues with access to the pavilion, the layout, and security and safety issues, especially with so many young people using the facility.

The new one-story building was designed with a large space in the middle, raised off the ground by 1.2m to mitigate flooding, with offices and storage on one end and change rooms on the other.

"I've had discussions with people using the facility who say [the new design] is a bit flash," Alderman Jon Raynor said in August.

"My initial thought was a two-storey building with a meeting room up the top that could be used as a community hall, and change rooms down stairs.

"The design looks great, but I am unsure if it is fit for purpose."

Four key sport groups at the sportsground - the tennis club, BMX, the YMCA and cricket players - said they would not likely use the pavilion in a survey during the consultation phase, due to its location.

The original project manager of the Don Dale Pavilion, Pancho Jack, criticised the plan to demolish the building shortly after the architects first revealed their new design.

Mr Jack, who worked for Katherine Town Council for 29 years and oversaw much of the building works at the Sportgrounds said he expected the pavilion to last 100 years.

"We built it to withstand a nuclear attack," Mr Jack said at the time.

He said the cost of the demolition alone could instead pay to revitalise the sturdy building, while leaving funds for an additional building at the sportsground.

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