The informal meeting organised by Eden Cove resident Chris Pullin aimed to explore ways to improve Lake Curalo's appeal both as a local attraction and tourism destination.

"The lake has no appeal as a paddling, swimming or fishing destination, which is a shame. Most agree it now resembles a shallow swamp more than a lake," Mr Pullin said.

Many residents believe the issue is man-made, requiring a man-made solution. They claim the lake is clogged up due to build-up of silt and sediment from road and track works, housing and commercial developments and degradation of naturally filtering vegetation.

Mr Pullin said the best solution would be semi-regular dredging of the entrance to remove sand at the mouth of the lake, but that council's preference was a naturally occurring opening.

"Unfortunately, the horse has bolted. The lake is dying. There are dead fish floating on the surface, and a horrid smell. It's becoming a swamp."

Others at the meeting claimed the lake was "putrid" and driving away regular tourists because of the smell.

Coastal management officer for council Rachel Duczynski said the lake was inspected last Friday and it was clear the recent rainfall had improved the condition of the estuary - "minimal algae was observed, and no odours or dead fish noted".

"Council is aware of the issues and community concern regarding the lake and has conducted ad hoc sampling over the past few months in response to reports of water quality issues, including the presence of algae and dead fish," Ms Duczynski said.

She said the prolonged dry conditions have caused similar issues in estuaries across the state.

Preparation of a Coastal Management Program for Lake Curalo is underway, with a focus group meeting planned for April 1.

"Council will continue to monitor the conditions of Lake Curalo as required, along with other estuaries within the Bega Valley, whilst working to progress the Lake Curalo CMP," Ms Duczynski said.

Mr Pullin said he wanted to see a holistic management plan from council which included revegetation and silt traps, as well as have council more actively dealing with rubbish in the lake and its surrounds - "to get rid of the tyres and shopping trolleys that lie in the muck".