Following four days of strong rain and ferocious winds in January this year, an old landfill tip on Stockton Beach was exposed and rubbish began to pour out onto the beach and into the ocean.
Four months on, 8 thousand tonnes of rubbish still remains on the beach awaiting disposal.
Newcastle City Council and Hunter Water are working together to dispose of the rubbish safely but were hoping the Environmental Protection Authority would grant them an exemption from the waste levy.
The levy currently stands at $138.20 per tonne of waste, meaning the cost of the cleanup would jump from $3 million dollars to over $4 million dollars if an exemption was not granted.
The EPA can grant exemptions from paying the hefty levy if rubbish was caused by a severe weather event, something which many residents believe occurred in Janurary when more than 15 metres of sand in some areas was eroded from Stockton Beach.
Council and Hunter Water's request to be granted the levy was refused, with The Office of Emergency Management not declaring the storm a 'natural disaster' and deeming it not severe enough.
The issue has sparked heavy criticism over the state Governments waste levy scheme, with critics accusing the government of using the levy to prop up Government coffers.
According to a statement from Hunter Water which was provided to 2NURFM, all the material will be excavated from the site and disposed of by the end of June.