A Project Control Group (PCG) formed to oversee a feasibility study into the removal of the stockpile, estimated to contain anywhere between three and 10 million tyres, has met for the first time.

Cr Wayne Rice said the tyre stockpile has been identified as one of the municipality's highest risks.

"This is one of the biggest headaches not only for this council but the State Government," he said.

"It has been spelt out to us by the CFA and the EPA that if this stockpile of tyres was to catch fire it could see the closure of Stawell and the Grampians for the next 30 years. That's a risk we can't afford to take.

"It is a massive problem, it is a massive risk, we fully understand that and we're trying to work our way through it."

Project Officer Sara Heckbarally said the PCG has been formed to guide the direction of the feasibility study and identify achievable solutions that will provide the best outcome for the removal of the tyre stockpile.

"Given the increasing severity and prevalence of bushfires in the region and the size of the stockpile, if it were to alight, there would be catastrophic implications for the community, environment and local economy," she said.

Ms Heckbarally said council has had extensive consultation with landowners, commercial enterprises, government agencies and community stakeholders over the tyre stockpile.

"The formation of a project control group comprising regulatory agencies, council, stakeholder representation and government departmental representatives is key to gaining a common understanding of the complexities of the risks and issues for the stockpile, and developing realistic options," she said.

"The primary focus of the PCG is to remove the risk to public safety and environmental hazards that are present with a stockpile of tyres.

"Outcomes to do this which provide a sustainable industry and economic investment in the shire are also a key consideration of the project outcomes."

Cr Kevin Erwin said tyre stockpiling is a world wide problem and that council could take a lead role with any potential solution.

"It is certainly a challenge, a huge problem that needs to be addressed and I think there is a real opportunity to actually come up with something that is viable and could enhance the safety of Victoria," he said.

Ms Heckbarally said there are a diverse range of proponents looking to process the tyres utilising varied processes and business models.

"A number of enquiries have been made to council and stakeholders by businesses wishing to utilise the stockpile for productive outcomes," she said.

"There continues to be conjecture however as to the ownership of the tyres and the status of adjoining lands that would be utilised to establish and process the tyres.

"To date this uncertainty is not providing a sound enough basis to encourage large investment on the site by private enterprise in order to establish businesses that can utilise the tyres for productive outcomes.

"Similarly, due to the complexity of legal and planning issues associated with the stockpile and adjoining lands that could be used to process the stockpile itself, council has been unable to provide prompt and definitive planning advice in relation to land use and associated regulatory advice.

"This is also inhibiting surety of investment by private parties, thereby curtailing the potential of the stockpile being utilised productively."

Council has secured $45,000 funding from Sustainability Victoria through the Community Sustainability Infrastructure Fund, to undertake the $60,000 feasibility study in to the Stawell tyre stockpile.

The PCG will meet again on March 18, while the project is planned to be completed by November 2015.