He said work would have to be done on small sections at a time.
"However, this does look illogical to road users who question why we just work on small areas."
He said retaining walls would not now be built but where the road was subsiding, the council was working with farmers to shift roads on to their land.
Meanwhile, logging traffic was predicted to treble which, combined with wet weather would turn "small bumps in the road into areas where drivers have to travel very slowly over".
The council had applied under the higher Targeted Enhanced Funding Assistance Rate which would have significantly reduced the council's contribution, as well as for traditional funding."But there was no money in the kitty."
The news came less than a week before a planned public meeting at Herbertville to update residents on progress, and Collis said the community was devastated.
Councillor Jim Crispin said locals would have been keen to learn what progress had been made.
He said the condition of the road had been an issue for four or five years.
"The community was consulted and through the annual plan the project was accepted. There were regular meetings to keep the Herbertville community updated and it was understood funding had been approved."
He said it was essential work be carried out on the road because of its shocking state.
"This was the single most expensive project that would have been undertaken in the district. It's a major arterial route that is used by an increasing number of logging trucks, the farming sector, local people and tourists."
Crispin said if politicians drove the road themselves, they would recognise the need. "Herbertville is such a positive community that doesn't ask the council for anything so it was difficult telling them there had been a complete about face."
Long-time resident Top Gollan said the news was "a real shame".
"With winter about to start the road will be stuffed."
