The section will cost rate payers about an extra $10,000 - but is intended to be more pleasing to look at than concrete.
The row cast a shadow over a $240,000 gift by former transport company owners Matt and Heather Purvis to extend the lakeside concrete walkway 1.7km along waterfront reserve at Five Mile Bay.
The track, popular with walkers and cyclists, begins 10km away in central Taupo.
While the donation and the plan for the concrete track were notified in council agendas, letters to houses in the area, council press releases and media coverage, objectors with holiday homes say they had no knowledge of it until construction started in December.
Among them were the Sneddens and their neighbours, Hawkes Bay lawyer Peter Twigg and Wellington cardiologist Malcolm Abernethy, who say they should have been consulted.
Contractors pouring concrete were met by Dr Abernethy, whose pleas to halt were ignored until Taupo Mayor David Trewavas arrived 90 minutes later with a senior council officer.
Dr Abernathy confirmed legal action was considered at one stage.
Senior council officer John Ridd said the solution meant the path in that area was now "limited to mountain bikes".
Mr Snedden dismissed the claim, saying the strip would be able to be used by all once grass had grown through to complete the path.
He also rejected any conflict with his role heading the Tourism Industry Association.
"I think this is a private situation. I'm not the dominant voice. I'm just someone expressing an opinion."
He said a lack of consultation with holiday home-owners was a major factor in frustrations.
"They knew the residents here are people who are not here for 52 weeks of the year."
The home was a family retreat - Mrs Snedden had been going there for 50 years and he had for 30.
"If people want to treat us as outsiders, they can - but we've been here longer than most."
The objection wasn't against the path, which "goes nowhere".
"All it does is finish a little further on." He said it was not properly suitable for cycling.
"You can't ride two bicycles side by side on this path."
An email by Mrs Snedden to the council, supplied by the Sneddens, raised concern about the danger posed by cyclists to children and elderly. She also said the narrowness of the reserve in front of the holiday homes meant "the impact of a concrete strip is visually more dominant".
Mr Trewavas said he hoped those objecting would help ratepayers meet the cost, which included regular watering to encourage grass to grow through the matting.
"They didn't like the aesthetics of the concrete. They preferred it to have a slightly better look than concrete."
He said the solution was probably not permanent.
"This is a measure to appease some people for the moment."
Deputy mayor Keith Crate said those who lived in the area were irked it was temporary residents who were complaining.
"They only come here for a week a year. It's arrogance."
