Four weeks after the opening of Rotorua's night shelter the homeless have been told they can no longer sleep there overnight.

Rotorua Lakes Council staff inspected the property yesterday and found the site was being used for overnight sleeping, a breach of the agreement between the council and organiser Tiny Deane, of Visions of a Helping Hand.

Operations group manager Henry Weston said the council "has no discretion here".

"It's a matter of people's safety and we have a duty of care. We've been very clear about that from the start and this was reiterated with Deane."

However, Deane told the Rotorua Daily Post the council had always known what was happening in the shelter.

"They knew. I've been in the room with them and said to them that none of us are dumb, we are all adults and all of them knew what I was doing."

He said he was just trying his best with what he had.

"It hasn't been easy, it's been so frustrating, in more ways than one."

He said he had been working more than 100 hours a week but everything he had done for the homeless in Rotorua, had, in his view, been knocked back by the council because of "systems and policies".

He was close to tears when speaking to the Rotorua Daily Post yesterday about what this may mean for the future of the night shelter.

"We've done our best and we have kept these people off the streets. I'll just have to remove the beds."

The shelter was set up after more than 120 people marched to the doors of the Rotorua Lakes Council during a Hikoi for the Homeless, stressing the urgency for a night shelter to prevent homeless people from dying on the streets.

Weston said the council had been working for some time with Deane to "support his efforts to establish emergency housing and a night shelter" and would continue to work with him.

"The building needs some work before it is safe for the purposes of overnight sleeping and Deane had agreed to operate it as an overnight drop-in centre – not for overnight sleeping – until such time as he was able to get the required work done for a consent that would enable him to have people sleeping there overnight.

"We are doing what we can to help Deane meet requirements which need to be met to ensure the safety of the people he is helping, and have assured him a consent would be processed as quickly as possible.

"The people he is helping are vulnerable and many have drug and alcohol issues so it's very important that where they sleep is safe. A confined space without proper fire systems would pose a huge risk."

Deane said he had put beds in the night shelter because "people need to sleep".

"We're going to have our work cut out for us. We'll be trying our best to keep [the homeless] awake, otherwise they're sent back outside into the cold."

Deane said when council staff visited the shelter shortly after he took over the lease mattresses were in place but stacked in piles.

In a written response to Rotorua Daily Post questions, Weston said "at that time there were no beds set up".

"Today when staff visited it was clearly being used as a dormitory."

The council did not answer Rotorua Daily Post questions about whether it had received complaints in relation to the night shelter, how many and what they entailed.

Rotorua MP Todd McClay said there was a feeling in the community that city leaders made a lot of commitment at the end of the hikoi and he was sure leaders would want to honour that commitment.

"The council has to pull out all the stops to get consents in places as quickly as possible.

"Taupō District Council had consent within four days [for its night shelter] and while I know the circumstances might not be identical here, the need is."

Waiariki MP Tamati Coffey said looking after the city's homeless was a team effort and it had to be looked at like that.

"I understand there are processes we have to go through and we have to all remain focused on the goal.

"I would encourage the council, community and iwi to rally around and find a solution, rather than focusing on who's right and who's wrong."