The major housing development was rejected by a majority of Blayney councillors during the ordinary general meeting on Monday night with a call by deputy mayor Allan Ewin to "do this better."

Under Blayney Shire Council's code of conduct rules councillors have 24 hours after a council meeting to submit a rescission motion to nullify any decision made at the meeting.

The motion was also signed by councillors David Kingham and John Newstead, who voted for the development on Monday night.

Cr Ewin said that as the project stands it's permissible under council's current Local Environmental Plan and Development Control Plan and as such should be passed.

"There may be a few issues that individual councillors can see as it is at the moment, but we need to revisit it as I don't believe that the best decision by all councillors was made on the night," he said.

During the discussion on the development mayor Scott Ferguson had declared a pecuniary interest and stepped out of the meeting and didn't vote.

Scott Denton was absent from the meeting due to illness and was unable to attend by Zoom.

With six councillors now able to vote on the application Cr Ewin is confident that a proper decision will be made.

If Cr Denton sides with councillors Bruce Reynolds and David Somervaille against the development, the project's success would hang on his casting vote.

If he abstains the project's future would be handed onto the next council after the September election.

During the council meeting Cr Newstead commented on the possibility of legal costs being borne by ratepayers if the applicant was unsuccessful.

"My fear is that the developer could take us to the Land and Environment Court going on the fact that there is nothing in our LEP or DCP that stops this from going ahead," he said.

Cr Bruce Reynolds voiced his concerns regarding drainage issues during the debate on the development application fearing ongoing costs to ratepayers.

"We don't want to leave a legacy issue," he said.

"Most of my concerns are around water and drainage. The last thing that I want is another Unwin or Stabback Street in Millthorpe. That's going to cost our council over a million dollars to rectify."

The visual impact of the development, in particular the density of housing proposed and the visual impact of it, is one of the reasons that Cr Somervaille voted against the development.

"This is almost a seminal point in the development of Millthorpe," he said.

"There is a demand for residences in Millthorpe and we need to meet that, but on the other hand we need to balance that with the need to protect the unique historical setting of Millthorpe and its well preserved historical features.

"The zoning here is the same as those to the west so we need to make sure that the pattern of housing here is the same."

The developers Lynne and Glenn Mortimer chose not to make a comment.

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