"Anecdotal evidence suggests drug use and sexual activities take place regularly at the carpark and beach during all times of the day and night, resulting in hazardous rubbish, such as syringes, being left on the beach and within the carpark, and surrounding bluffs," the report said.
Local councillor Steve Holland said it was "a good time to review" the status of the beach however councillor Paul Mercurio opposed the discussion.
The council decided it will hold a consultation on the beach's nude status in March.
However, should the Mornington Peninsula Shire Council wish to remove the legal protection for Sunnyside's nudist visitors, they will have to ask the state's Planning Minister Richard Wynne to change it, as the council itself does not have that power.
The Keep Sunnyside Beach Clothing Optional action group has blasted the council consultation.
"The beach is a public resource," the group said.
"It is not a private beach for those adjoining landholders to have for their exclusive use."
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Posted by Keep Sunnyside Beach Clothing Optional on Friday, January 14, 2022
'Can't say it's pervert free'
The beach has long been plagued by controversies and has been hit with bad reviews on Google for many years.
"Won't recommend to go as a solo woman. Beautiful beach but lots of creepy men, some trying to pretend to not get near to you but you can obviously feel it. I felt uncomfortable and I had put clothes on," one woman wrote 11 months ago.
"When I fell asleep, I saw a man watching me behind the rocks doing something indecent to himself. Sad that I cannot feel free, safe and relaxed here without disturbance. It's a nude beach but it seems to be a hook-up beach with mostly sleazy men."
Another reviewer said there was "just too many creepy old men coincidentally driving around (sometimes parking for five minutes) making the outing unpleasant".
A third appeared indifferent to the situation.
"Can't say it's pervert free. But hey, it's one of the very few nude beaches in Victoria," they wrote.
There are only three clothing-optional beaches in Victoria: Sunnyside North on the Mornington Peninsula, Point Impossible Beach in Torquay and Southside Beach near Point Addis.