Auckland's much-loved Whitcoulls Santa has been saved.

Auckland property development firm Mansons TCLM this afternoon pledged to take on responsibility for storing, installing and maintaining the 18m, five-tonne Father Christmas that has watched over downtown Auckland since the 1960s.

SkyCity has also pledged $50,000 to the effort.

Auckland's downtown business association Heart of the City yesterday said it could no longer afford to pay for the Santa. The association said it cost $180,000 a year to erect Santa at Christmas and keep him safe in the off-season.

A large public backlash followed, as New Zealanders recounted their happy memories of seeing first Santa on the old Farmers building on Hobson St - when he had a winking eye and beckoning finger - and in more recent years outside the Whitcoulls building on Queen St.

In 2009, Santa had a $100,000 makeover, losing his come-hither wink, and reappeared with fuller, less-frightening facial features.

Mansons TCLM spokesman Culum Manson said the family was pleased to ensure Aucklanders could continue to enjoy their traditional Christmas, with Santa centre-stage.

"We all grew up with Santa and Christmas wouldn't be the same without the big fellow up on Whitcoulls corner," he said.

"We'll use our own cranes, transport, equipment and crew to get Santa back up where he belongs in time for Christmas."

Heart of the City chairman Terry Gould said the generosity of Mansons and SkyCity meant the popular figure and his reindeer would resume their traditional position this Christmas.

"We are overwhelmed and delighted by the public interest and support for the iconic Santa. The generosity of these businesses . . . is a fantastic outcome for Aucklanders and Heart of the City."

Prime Minister John Key added his voice to the save-Santa chorus earlier today.

"I'm going to join the group of people a bit saddened, actually, by Santa not being there.

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"He's been there since 1960, I think we've fixed the eye issues, so at the end of the day I for one will miss his presence not being there."

News that Auckland's Santa was to be missing from the central city this Christmas was met with widespread disappointment by NZ Herald readers.

Anne Young, 73, said she always looked forward to seeing Santa up on the corner of the Farmers every Christmas.

"In this throw-away world we all seem to live in these days surely it is important to have a little bit of magic for our young children to see and dream about. What cost is it to take something like this away?"

Lisa Shelly described the Santa as an Auckland icon.

"Are they going to stop the Santa parade too? Why don't we forget about Christmas altogether this year.

"If cost is really a factor then I hope that the members of Heart of the City didn't get any big pay increases this year."

Andy Morris said Auckland would not be the same at Christmas without the giant Santa.

"We used to come every year as kids just to see him . . . and as an adult too. Why not have a cheaper inflatable one as an alternative?"

The cost of the installation was questioned by a number of readers.

"Perhaps the cost of installing could be lowered, that sounds a very profitable installation job," Maureen Tomlinson said.

Doug Moulin was blunter in his reaction to the announcement, saying "somebody is ripping the council off. How can it cost that much to transport and attach Santa?"

Another reader described the Santa as a glimmer of hope in Auckland's "bureaucratic madness".

"As an aside, who on earth would pay $180,000 to put Santa in place (and remove). Someone is taking the mickey."

Heart of the City's events and sponsorship manager Jane Stewart had earlier said if someone came forward with the funds to install Santa, they would look at the offer seriously, and Auckland Mayor Len Brown also indicated it might not be the end of Santa.

"The news that Santa's presence in Queen St during the festive season may be in doubt will disappoint many Aucklanders,'' he said. "People with ideas about how to support Santa's continuing presence in the city centre are encouraged to come forward."

Kuldip Patel suggested the council launch an online funding campaign to save the Santa.

"If single person just contribute as little as $5 we only need 36,000 people to contribute, and I think in the city of 1.5 million people, there will be 36,000 people who would love to contribute."

Santa was first put up on the corner of the Farmers building on Hobson St in 1960 and appeared there every Christmas for almost 30 years.

- additional reporting Patrice Dougan