A SOUTH Australian council, which forked out $300,000 setting up a town's caravan park, has decided to sell it ... for just $30,000.

Now outraged Lameroo locals have organised a petition opposing the sale of the 16-site Lameroo Lakeside Caravan Park, about 210km south-east of Adelaide.

South Mallee District Council chief executive officer Rod Ralph told Caravanning News it had been delivered to him and would be considered by councillors at their next meeting on June 8.

The community had battled for more than 20 years to get its own caravan park and residents were over the moon when it was opened in 2007.

But the council now wants to offload the park and in a meeting which was closed to the public decided by just one vote to sell it for a tenth of its investment.

"There's a lot of people up in arms over it ... the community wanted a leased arrangement," local Ken Steer told media.

Mr Ralph said the council could not afford "much needed" upgrades to the four-year-old waterside park.

He argued that if the council was able to get $250,000 for the park it would simply reduce the money a buyer would have available to spend on improvements.

In a report, the council said the timing was right to attract "a business person" willing to carry out cabin upgrades and asset improvements, relieving it and ratepayers of the financial responsibility for capital expenditure.

Operating a commercial enterprise was not seen by many as a core business function of council.

In a business profile of the park, the council had previously said it was prepared to enter into any long term lease up to 21 years provided the parties could agree on minimum expectations for improvements.

This included accommodation options and the availability of amenities "for the enjoyment and pleasure of those using the park's facilities".

The council also said the primary reason for shedding its responsibility for the park was "to allow private enterprise the opportunity to show council that it can manage or own the caravan park and provide outcomes which may well be better than what council can do under the current management regime".