Grey District Mayor Tony Kokshoorn wants Solid Energy to hold off sealing up the Pike River Mine until a final deal can be reached with the families.
Earlier this month the families of the men killed in the 2010 tragedy said they'd taken legal control of the road in and out of the site. Solid Energy, which plans to seal the mine, on Saturday said this was not the case.
"We accept that there was a genuine misunderstanding, but have now been advised by the landowner that he has told the protesters that they do not have the legal right to occupy the land," the company said in a statement.
Mr Kokshoorn says the ongoing saga is back at square one.
"It's a situation which just seems to be going around and around in circles, and it's difficult for everyone," he told Newshub. "Solid Energy and the families need to just try and work this through, step by step."
He doesn't think it'll be long until Solid Energy makes a move to permanently seal the mine, ending hopes the bodies of the 29 men will be recovered. But he's holding out hope the company will be able to come to an agreement with the families in some sort of compromise.
"I know it's probably imminent now they'll push on, but I'm appealing to Solid Energy to give it one last look. Work with the families here and see what they can come up with."
Families spokesman Bernie Monk says the families' lawyers are looking into the road access situation.
"It changes nothing as far as we're concerned because at the end of the day the damage has been done for Solid Energy - the contractors have pulled the pin over here on the West Coast, no one's going to do any work for them, so I can't see any advantage whether they've got it or not."
He says the protestors won't necessarily end their blockade.