SQUATTERS have moved into a number of properties around Dungowan Dam and Tamworth Regional Council wants them out.
A proposal to knock down several council-owned dwellings and sheds in the area will go to a vote on Tuesday night.
In case the dam ever failed, the council started buying up properties in the area to ensure there would be no risk to lives.
All of the properties except one between the existing dam and new $480 million Dungowan Dam are now owned by council.
A number of the sheds and dwellings will be flooded when the new dam is built.
The proposal is to knock down the dwellings and sell some of the larger sheds to recoup costs.
It's estimated the cost of demolishing the buildings will be in the order of $100,000.
Selling the sheds is expected to earn $15,000.
At the moment the council does not have funds available in its Annual Operation Plan to fund the demolition works.
Any funding would need to be taken from the council's Water Reserve.