The council spends about $90,000 a year to manage an area of the reserve, but it wants to hand that responsibility to the State Government.

The council had no way of raising money to cover its costs, but the Government makes money from the reserve by leasing land for transmission towers and charging groups to use the area.

A council report said the National Parks and Wildlife Service was charging groups for visits.

Not a cent of that money went to the council, despite the groups using council-maintained car parks, toilets, picnic areas and barbecues.

The report said the wildlife service "may choose to charge an entry fee into the Mount Sugarloaf picnic area", if it took control of the reserve's amenities.

Conversely, the wildlife service had indicated it "was not interested in managing or maintaining" the amenities, a council report said. There was a risk the area would deteriorate if the council handed the land to the Government, the report said.

The council had been manager of 450 hectares of the Mount Sugarloaf reserve area, but the Government recently changed the arrangement.

Crown land and State Forests were joined to create the 4000-hectare Sugarloaf State Conservation Area.

The council was left to manage eight hectares, the most costly part of the area to maintain because it contains the majority of amenities.

"It is logical to have one land manager," council recreation and land planner Brad Sutton said.

"We'd like to hand the land back to the State Government."