Elected officials have voted down Tauranga's $55m museum project.

The decision came after a heated debate watched by a full public gallery.

The general theme of those who voted against the proposal was that while many members of the public may like the idea of the museum, they did not want one with a price tag of $55 million - even if the council's contribution was capped at $15m.

Councillors have also said no to spending $42.3 million new central library.


After the vote, split five to six, the issue was put aside to see if an alternative proposal can be worked up over the next couple of days.

Earlier: Dozens of people turned out to watch the council decide the future of a potential Tauranga museum and a new central library this afternoon.

Many are bearing placards supporting the museum proposal.

The future of both projects were looking shakey following Tauranga City Council's decision this morning to attempt to bring the rates rise back to 3.8 per cent for 2018-19.

That was down from a 6.8 per cent increase in the draft being debated today, and the 9.7 per cent the council consulted the public on.

In a split decision, councillors voted to instate a "preferred" rates increase cap of 2 per cent plus CPI after growth.

Funding of $20.7m towards a $55.7m museum on Cliff Rd and $25m for a new central library on Willow St was initially approved to go into the city's draft plan for the next 10 years.

After public consultation on the the proposals showed strong support for a future-proofed library, council staff recommended the library budget be increased to $43.5m.