Work to stabilise the Bervie Braes at Stonehaven has stalled, after tenders came in drastically over budget.
It is understood quotes for the project came in around £2.5 million more than the £3 million expected.
Estimates for the job were ordered by Aberdeenshire Council following a major landslip and mudslide that saw 100 householders evacuated in October 2009.
Thousands of tons of mud and rubble thundered down the slopes, damaging the road and causing damage to 60 houses.
Stonehaven councillor Graeme Clark said there had been slips at the Braes for more than 100 years and warned the area can be treacherous whenever there is heavy rain.
He added, “To find out there is not enough to pay for the work is very disappointing.
“I believe Transport Scotland were brought in to look at it because they had dealt with landslips in other areas, but obviously their estimate of £3 million has proved too low.
“From what I have been told the tenders for the work have come in at almost double that and now I can’t see anything being done until after the election.”
Last month, Kincardine and Mearns area committee members unanimously supported installing landslip prevention measures through “soil-nailing” and “rockfill” techniques.
The application for full planning permission was submitted to Aberdeenshire Council’s infrastructure services section, which put the work out to tender.
A budget for the overall project was set at £3 million, of which £2 million has been pledged by the Scottish Government and the remainder by the local authority.
An Aberdeenshire Council spokesman said, “Development work on projects to stabilise land at Pennan and Bervie Braes at Stonehaven is continuing, and the deadline for tenders for both schemes has now passed.
“It is expected that reports on both projects will be considered by the June meeting of the policy and resources committee.
“In the meantime, further consideration is being given to the financial implications of the Bervie Braes scheme, based on the outcome of the tendering process.
“Tenders for the Stonehaven project have come in significantly higher than expected and Aberdeenshire Council has written to finance secretary John Swinney for further guidance.
“In the current financial climate, Aberdeenshire Council cannot commit to additional expenditure for which there is no budget.”
Mr Swinney visited the town to see the problem at the time of the landslide. Although the council had identified that it would cost in the region of £5 million to secure the slopes, engineers were asked to reassess.
It was decided that £3 million would be all that was required to complete the repairs but tenders have now come in at nearer the original estimate.
Kincardine and Mearns area committee chairman Paul Melling said, “That is close to what we originally estimated and went to the government for.
“The community voted for that solution and the government in their wisdom did their own analysis and came back.
“I’m disappointed for everyone’s sake. I just want a solution. It’s just going to be that we as councillors will be faced with trying to make choices with limited resources.”
Some vegetation clearance has already taken place to allow the site to be cleared before the start of the nesting season, under permitted policies.
The clearance work was to avoid disrupting nesting birds in the spring ahead of planning consent being granted for works to stabilise the Braes.