Waka Kotahi (New Zealand Transport Agency) is putting on hold hundreds of millions of dollars of funding for projects designed to reduce New Zealand's emissions through encouraging walking, cycling and the use of public transport.

In a statement, the transport agency said before it could follow through with commitments already made to councils and other organisations, "it needs a clear direction from the incoming government on its transport investment priorities".

"We have informed affected council partners and we will provide further updates as we receive direction from the incoming government."

Waka Kotahi said the funding pause would affect the $305 million Transport Choices Programme where the transport agency was working with councils to deliver cycleways, walkable neighbourhoods and "make public transport more reliable and easier to use".

So far 46 councils around the country have applied for Transport Choices funding.

The decision would also affect VKT (vehicle kilometres travelled) reduction planning, which aimed to lower the number of kilometres travelled by New Zealand's light vehicle fleet through the promotion of walking, cycling and public transport use.

Both initiatives were funded via the Climate Emergency Response Fund (CERF) set up by the government to support the transition to a low-emissions and climate-resilient economy. Earlier this year it had a balance of $3.6 billion.

New Plymouth District Council began a second round of consultation this week on a proposal for cycle and safe walking routes in the city funded through a $17 million grant from the Transport Choices Programme.

Mayor Neil Holdom said the future of the project was now up in the air.

"So, we've been advised by Waka Kotahi that they've put a pause on any contracts being written for the Transport Choices package until they've heard from the incoming government.

"In a nutshell, the project that we are consulting on may not go ahead depending on what advice the incoming government provides."

Holdom, who was attending a meeting with other local government representatives in Wellington, said the pause on funding had implications outside of New Plymouth.

"So yip, that means ultimately we're unsure whether any of these projects that are not already under construction will proceed. It's a national issue.

"I think there's a number of councils that will be communicating with the incoming Minister of Transport over time to express their views on this and the projects, but at this time we'll focus on doing our consultation and coming up with a project that will work for our community and see if the government will fund it."

New Plymouth business owner and opponent of the proposed cycleway for the city, Shane Devlin, hoped the funding pause would end the project.

Co-owner of design company Graphix, he spearheaded a 7000-signature petition against plans for cycleways in New Plymouth which would see hundreds of car parks sacrificed along arterial routes in the city.

"Our petition had more than 99 percent against the project and only less than half a percent in favour, so yeah, if the new government's going to make this go away I'll be the happiest person in the world."

Devlin said the proposed cycle route from the city centre to State Highway 45 in the south west not only removed car parks but was unsafe.

"Literally every parked car, if you take a close look at the plan, if you try and get out of your car door you're stepping into a live lane. It just doesn't fit, you're putting yourself in danger."

New Plymouth was granted a 12-month extension to deliver a project, but it only has until 7 December to present a preferred design to Waka Kotahi for funding consideration.

Feedback on council's revised proposal began on Friday 3 November and closes midday Monday 13 November.

The council will meet on 6 December to consider the feedback and decide which design, if any, will be submitted to Waka Kotahi, for final approval.