Hepburn Spa Pty Ltd spokesman Alex Zotos said the company had made a substantial investment in the running of the bathhouse and was looking forward to participating in the upcoming tender process.

Earlier this month Hepburn Shire's chief executive officer Victor Szwed revealed the council was being kept in the dark over the State Government's handling of the redevelopment.

At the time he said the council was worried time was running out as the processes required to advertise for a new lease, assess and gain minister approval to award and enter into a new lease would take several months.

But Mayor Michael Cheshire said the council was satisfied with the outcome of recent discussions with the State Government.

"I think people need to be careful at election time about what the truth it," Cr Cheshire said.

"Council is pleased with the discussions with the State Government and we're working towards an outcome that will be favourable for the bathouse, the council and the community."

Birch ward councillor Warren Maloney also moved to allay concerns yesterday, saying the project was going ahead.

He said the State Government's $5 million commitment was "110 per cent".

"The council cannot make a decision in its caretaker period, however the council has requested the minister to make the decision or indicate to the new council the parameters of the decision," Cr Maloney said.

"What I can't tell you is what will happen if we have a council that's not progressive."

The spa resort's lease expires in April 2006.