As revealed first on Tuesday morning on The Gippsland Times website, sale.yourguide.com.au, Planning Minister Justin Madden has extended the interim controls which prohibit development outside defined settlement boundaries between The Honeysuckles and Paradise Beach, for another two years.

The existing moratorium was due to end on Tuesday at midnight, but has been extended until June 30, 2011, to ensure properties are developed in line with the State Government's coastal strategy.

Mr Madden said the government was taking action to minimise the impacts of climate change while finding a long term solution to planning issues along the Ninety Mile Beach.

The controls are being extended so Wellington Shire Council and the government can finalise transition arrangements which may involve land swaps and an adjustment package.

"I have asked council to give priority to identifying the options available to those people who have, in good faith, amalgamated lots or purchased land at higher elevations outside the nodal areas,'' Mr Madden said.

About 11,700 urban-sized lots were subdivided and sold to the public during the 1950s and 1960s.

The lots are located on a narrow area over the primary dune between Bass Strait and Lake Reeve.

"These lots are currently vulnerable to inundation, erosion and are likely to be further threatened by the impacts of climate change,'' Mr Madden said.

"Many of the existing lots do not have access to electricity, reticulated water or waste water services, meaning there are significant environmental management issues for development of the sites.''

The minister said it was important for landholders to move to higher ground in the settlement nodes, so the government must work alongside council to finalise permanent planning controls for the area and help with any transition.

Council first requested interim provisions to prevent inappropriate development along the Wellington coast in December 2007.

Wellington Shire mayor Darren McCubbin said the minster gave council "a clear ultimatum'' to find a solution for those people who amalgamated blocks of land.

"He certainly wants to see a solution for those people brought forward,'' he said.

"This is a good result for council.

"We have been loudly advocating that we need appropriate solutions along the Ninety Mile Beach, and we're very pleased that the government is looking at fast-tracking those developments over the next two years.''

The Honeysuckles Action Group president David Lawther described the move to extend the moratorium by two years when council initially wanted five as "extraordinary''.

"I feel sorry for the owners because it's all based on global warming hysteria,'' he said.

"It's basically false science.

"I feel sorry for the people who bought land because they bought it in good faith.

"This has been going on for years.

"A decent compensation package would be prudent or an offer of land at Golden Beach or The Honeysuckles as compensation,'' Mr Lawther said.

"Where the money would come from is an issue.''