He said organisers would consult with artists and the public after this year's event about whether to continue on the coastal walk or move to a new location. It was "still likely" to be the last event at Bondi, with a scoping study for another site starting next week.

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Last month, Mr Handley sparked a bidding war among councils in Sydney and other parts of the country to host the event when he said the path "totally puts a kibosh on the exhibition and rips the guts out of it."

Late notice of the path's construction meant they had to run the event on the coastal walkway again despite the problems with the site.

"We had no alternative but to proceed with this year’s exhibition as the artists were well advanced with making their sculptures," he said. "But we need to see very significant changes to the way our organisation is treated by the current council."

Mr Handley visited the park last week and believes the path will affect key sights for placing sculptures.

"The exhibition will be significantly negatively impacted by the new lookout and stairs at the eastern edge of Marks Park and the new concrete path council has now built along the ridgeline," he said.

"This has meant eight of our landmark sculpture sites are no longer available or are greatly compromised. These were among the best locations for sculpture in the world where it was logistically possible to fix large sculptures into the ground with an uninterrupted view."

Cr Wakefield said the council might not bid if Sculpture By The Sea called for expressions of interest after this year. He believes the coastal walk is the natural home for the event.

"Bondi is Bondi," he says. "It's part of the draw that Sculpture by the Sea is. It's hard for [them] to ignore the fact that a lot of its success revolves around the location."

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Bondi had another drama over public art last week when a controversial mural by street artist Luke Cornish that was protesting the country's treatment of asylum seekers was defaced with white paint.