A Wanganui builder's yard has been given the all-clear from possible asbestos contamination, but more testing on other parts of the Wanganui East property will have to be done.

Mike Watson, owner of Wat's On Building, had to close his Pehi St depot in September after traces of asbestos were found on the property.

The land had previously been part of Eastown railway workshops, and when traces of asbestos were found Mr Watson immediately closed the depot. Laboratory tests have shown clear readings and the depot has reopened.

The Chronicle reported on September 18 that initial tests had shown unacceptable soil levels for asbestos and other contaminants but yesterday he said specialist air and ground tests had given the all clear for business to resume.

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"We've been very busy lately, and working from home and out of vans has been very inconvenient," he said.

Mr Watson expressed his thanks to immediate neighbours for putting up with any inconvenience.

He said the initial testing focused on the company's depot, which is on part of the 1.2ha Pehi St site and not to the balance of the land he hopes to develop.

He and his wife, Andree, had plans to build a house on the site and preliminary plans had been drawn for the house. And it was expected that further residential subdivision would occur.

He said the next stage would involve testing of the vacant land.

"We have to address that now moving forward. That will be much harder, and could be much more expensive.

"The balance of the land is mostly bare and grass that's now growing wild. I'm not able to control this as much, unlike my depot which is primarily a covered concrete area," Mr Watson said.

"Further testing will assess the extent, and possibly the cause, of the contamination."

He said he was working with Horizons Regional Council to get assistance from the Government's Contamination Remediation Fund to assist in the further testing and assessments and the council had been supportive to date.

While not prepared to divulge the cost having the property tested, he said it was "horrendous".

"It's very expensive testing that we had to have carried out, but we needed that to give safety assurances to our staff and customers.

"New Government legislation (from 2011) meant we needed to do this testing, but I wonder whether the Government had taken into account the costs these specialists impose, and councils now require. It's quite punitive," Mr Watson said.

But he suggested other developers in Wanganui are likely to be facing similar requirements because the regulations affect any property that has had a previous commercial use.

"So if you're looking at making any change to that property, then these checks kick in."

Mr Watson said it could have significant ramifications for Wanganui, which he said had been slow to react to the regulations.

"The problem is that it has the ability to restrict the city's economy. The Government may talk about cutting red tape, but in this case they've added to it."