Cr Baldock said it would be difficult to find a local or national image to reproduce due to issues with copyright laws.
"Councillors expressed it would be better for a local or national image or something in relation to the Battle of Gate Pa, I don't know what will eventuate. It's really between iwi and the artist, it's got to be something Owen feels he wants to paint. It would have been worse if Owen painted it then found there was a real offence to iwi."
Murals on the Elizabeth St parking building are next on the agenda and Cr Baldock said he was keen to see Dippie's work on the walls.
Ngai Tamarawaho spokesman Pere Kohu said the planned mural for the Dive Cres wall was inappropriate due to the cultural significance of the area.
"I think if we sat down and had a talk we could come up with something that would be appropriate. I don't have any views on the murals but I do think what was going there wouldn't be appropriate for the area. The opportunity is there even if it was raised in a way we weren't consulted, I'm happy we've moved past that stage."
Mr Kohu said he would be happy to sit down and talk with relevant parties about ideas for a more appropriate mural.
Project spokesperson Anne Pankhurst said the issues around the project wouldn't stop it going ahead.
"We've already had several offers of walls to paint on, there has been a lot of interest from the commercial sector. Everything is all on track. We came across a couple of issues when the [Dive Cres] wall was still being sandblasted, the wall still needs a bit of extra work on it which also held things up."