The remaining cyclists tried phoning for help but were able to continue once the dogs retreated to the property about half an hour later.
In the blaze of publicity that followed the council acted quickly to seize three animals, two grown bull mastiff-sharpei cross dogs and a 10-week-old puppy.
A fourth dog, a whippet cross, could not be caught.
The owners were not home and could not be found at first but they eventually contacted the council.
None of the animals was registered.
Environmental services manager Rochelle Deane said the council, after assessing legal options, had decided not to prosecute the dog owner or seek a destruction order from the courts.
There had been no previous complaints about the dogs and the cyclists had not been physically attacked, she said.
''On balance, we believe the incident would not meet the threshold required for a judge to order destruction of the dogs. That leaves us few options except to fine the owner for not registering the dogs, classify them as menacing, and ensure they are desexed. If impound fees are paid, we must release the dogs to the owner.''
The owner claimed the fourth dog had been rehomed.
Deane said animal management officers would monitor the property regularly to make sure the dogs were under control.
The Ngapipito Rd address where the dogs lived is not fenced.
A council spokesman said dogs were not permitted to freely leave a property, but under New Zealand law they did not have to be kept behind a fence.
They could be restrained by other means, such as a wire runner.
Only dogs classed as dangerous under section 31 of the Dog Control Act must be kept in an enclosure.
The Ngapipito Rd dogs were classed as menacing, not dangerous.
The June 4 incident alarmed Di Maxwell, owner of Kaikohe's Left Bank Hotel, who called on the council and police to act before a visitor was injured or business and much-needed jobs were lost.
She was reluctant to "make a noise" because cycle trail users comprised about half her guests, but feared the problem would get worse if she didn't speak up.
Even though the dogs could be returned to the owner, Maxwell said requiring them to be muzzled and desexed was ''a step in the right direction''.
The Auckland cyclists told the Advocate they experienced superb scenery and top-notch accommodation and transport, especially on the western half of the trail, but could not recommend it to others due to safety concerns.
One of the riders, Nicky Davidson, said it was ''incredibly disappointing'' a minority was derailing other Northlanders' efforts to raise up their community.
Other Ngapipito Rd residents told the group the dogs regularly rushed passing cyclists.
The Pou Herenga Tai Twin Coast Cycle Trail stretches 85km from Ōpua in the Bay of Islands to Horeke in South Hokianga.
Dogs are permitted on the trail, except where it crosses private land in Utakura Valley, but they must be on a leash or their owners risk a $20,000 fine.
One of the more serious attacks on the trail to date occurred in May last year when a Bay of Islands man was knocked off his bike and bitten three times by an off-leash dog near Ōpua. He required 14 stitches.
The dog owner gave false details but was eventually tracked down by police. He claimed he had put the dog down himself.
