The local gun club, the Daylesford Field and Game Association, uses Glenlyon Recreation Reserve for its events.

The multi-use reserve is within the township and is also utilised by other community members on a daily basis - from dog walkers, to families and the pony club.

And as the Loddon River runs alongside it, it is also brimming with wildlife - there are gang gang cockatoos nesting in trees and kangaroos hopping through the long grasses.

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Resident Kaye Powell remembers when she first started staying at the township as a 'weekender' almost 30 years ago and hearing the repeated sound of gunshots for the first time.

"The noise travels up the hills and you wonder what it is," Ms Powell said. "The way I'd describe it is like the final scene in a b-grade western [film], only it goes all day."

There has been much debate about the club using the reserve during the decades since, with one of the biggest concerns about the litter left behind after shooting day.

"We've walked our dogs there every day for years and years and every time after a shoot, the clay targets and plastic wads are left everywhere. We are pretty appalled by that," she said.

But it wasn't until floods, about a decade ago, unearthed the extent of the litter that she decided to voice her concerns.

"A lot of the tracks had been washed away and huge piles of lead shot were visible. You could scoop two handfuls of little lead balls up and it was just horrifying," she said.

With broken target pieces and lead flying into long grasses and sloping hills, it can be a difficult area to clean-up.

"On shooting day, hundreds of targets are flown up into the air. When they get shot, little bits fly everywhere and you would need teams of people on their hands and knees for a week after the shoot to pick it all up."

Ms Powell said it had been difficult to get authorities to listen, even when she took a bucket of broken target pieces into council, which had been left discarded at the reserve.

Earlier this year, Glenlyon residents spotted signs explaining that there were investigations into lead contamination at the reserve - sparking extreme community concern.

Hepburn Shire Council Chief Executive Evan King said council became aware of potential contamination issues in October 2019.

He said a Preliminary Soil Contamination Assessment was commissioned, which suggested elevated levels of lead in parts of the reserve.

The Environmental Protection Authority was then notified, with a plan developed to minimise health impacts on the community.

Since late last year, the club's licence - which included requirements to clean-up waste and debris as far as practically possible - has been suspended.

In January, the EPA issued a clean-up notice to the council and requested an Environmental Site Assessment (ESA) be completed.

While the assessment identified the lead levels were below the national guidelines for recreational areas, it identified Polycyclic Aromatic Hydrocarbon contamination in parts of the reserve. These are substances which can be found in clay targets.

This could require remediation, but Mr King said it was too early to determine how much this could cost.

Ms Powell said if money was going to be spent to clean-up the reserve, it should not be allowed to be contaminated again.

She and other residents are calling for the council to help the club to find a new home.

"It's a perfectly legitimate sport that I have no issue with at all, but it needs to be at a single-use venue," she said. "We're asking the council to put some effort in and help the club to find another venue."

Mr King said the council understood the mixed views regarding the club continuing to use the reserve and it would work to find the best resolution.

Daylesford Field and Game vice president Jody Wallace said the club, which has been using the reserve for more than 40 years, believe the complaining group to be the minority.

The club have shot at the reserve on the first Saturday of the month for many years and he said members tried to pick up as much broken clay as possible following shooting days, and they also hosted regular working bees.

"If you wander around the ground out there and you think about that we've been there for 40 years, the place doesn't look like a rubbish tip. We would like to go back to the [reserve] as it is where we have been for so long but we are also open to other options," Mr Wallace said.

"Starting another shooting ground is not as easy as keeping one, especially as we are a volunteer committee and we all have our own jobs and businesses to run as well as running a sporting club for the community."

In recent years, he said the club had used more environmentally friendly clay targets and would also be open to using steel instead of lead shot at the reserve.

All user groups of the reserve operate under licences approved by council in 2016, though the process to obtain new licences will soon commence.

For the club to be granted a new licence, Mr King said they would need to operate under an approved Environmental Management Plan which would be approved by council and the Department of Environment, Land, Water and Planning (DELWP).