In a letter to 67 siteholders on Monday, Goulburn-Murray Water (GMW) has given people until November 10 to vacate the park.

GMW is facing a $2.6 million maintenance bill to bring the park to required safety and environmental standards, with an outdated sewerage system the primary concern.

Siteholder Norma Ewing said people had begun to actively campaign against the closure since the letter first arrived.

"There's a whole group of people who are becoming proactive already," she said.

"Obviously we're going to fight it - we've been onto local councillors from Maldon and Newstead to see if they will take the issue to the Mount Alexander council.

"We want to see if there are any grants in place we can get our hands on to fund the upgrades needed."

Sites include an affixed annex and other permanent structures around a caravan, with siteholders required to pay an annual fee to retain their site.

Some predicted it could cost them as much as $14,000 to either abandon or re-locate their caravans.

People from Castlemaine, Newstead, Maldon, Bendigo and surrounding districts have sites in the park, which sits on the banks of Cairn Curran Reservoir.

GMW managing director Gavin Hanlon said the caravan park had operated under three unsuccessful models in the past and had been given "every opportunity to succeed".

"Welshmans Reef Caravan Park is not self-sustaining - and to succeed it must be able to meet its ongoing regulatory, operating and capital upgrade responsibilities," he said.

"As we continue to reduce our operating costs and create efficiencies we must look to reduce those elements of the business which are unproductive and which continue to place a heavy ongoing financial burden on GMW's customers."

Mr Hanlon said irrigators had asked GMW to examine its non-core services to bring costs down for customers.

Mount Alexander Shire Council rejected GMW's application to extend the park's registration for another six months.

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