At Thursday's meeting, council rescinded its decision to proceed with the traffic lights using $350,000 in RTA funding and a further $125,000 in Federal Government Black Spot Program funding.

The rescission motion was moved by Deputy Mayor Nick Campbell-Jones, backed by Cr Malcolm Murray and Cr May King, following a recent meeting which showed public support for the roundabout.

Council had previously voted in favour of the traffic lights as a faster and cheaper way to improve safety at the Bong Bong Street intersection, which is one of the two worst crash sites in the shire.

But the Bowral Chamber of Commerce and Industry opposed the lights on the grounds that they would divert more traffic along Bong Bong Street, create traffic queues and mar the northern entrance to Bowral.

Cr Campbell-Jones said the increase in traffic in Bong Bong Street due to the traffic lights would cause chaos and bring forward pressure for a by-pass of the town at an estimated cost of $30 million.

"If we don't go ahead with the roundabout now, we will be under giant pressure to go ahead with the by-pass," he said.

"The roundabout will alleviate problems to something immediately about a by-pass."

Finance committee chairman Cr Paul Tuddenham foreshadowed a motion that council determine its priorities for major projects in the life of the present council, including the Bong Bong Street roundabout, and that the finance committee prepare a funding strategy for the adopted priorities. Possible sources of funding could include but not be limited by the sale of surplus assets, the existing rating structure, savings, land development loans, Section 94 contribution, government grants, private sector participation and user pays. Cr Tuddenham pointed out that the RTA funding offer would expire on June 30 and RTA had indicated that it would not be offered again if not accepted.