About 860 ratepayers in Queanbeyan, predominantly local businesses, have been issued with bills for unpaid rates going as far back as the 2009-10 financial year.

Some residents said they had received bills of more than $10,000, while others have been given large refunds because of errors found during an audit of the council's property database.

Several ratepayers who have been affected by the mistake said they were considering a class action and Monaro MP John Barilaro has denounced the council's actions as ''disappointing''.

But Queanbeyan City Council general manager Gary Chapman said once the council had found the discrepancies in its records, it had no option but to charge ratepayers for the difference.

He said the legal advice the council had been given said it was unable to write off the debt or take it on.

"Once it's been brought to our attention we can't exercise discretion on who should pay and who shouldn't," he said. "The only powers available to us is to write off the interest, which we've done. We're certainly not charging anyone interest on these balances and the payment period is interest-free."

Mr Chapman said it also would not be fair to residents who had paid the correct amount of rates if those who had been incorrectly charged could avoid payment.

"Some of the figures being quoted are quite high and some are certainty not as high, but the ones that are high are understandably upsetting to those people," he said. "But we've given people up to five years interest-free period in which to pay those outstanding arrears off and five years is quite a generous time."

Mr Chapman said the council understood the position it had placed the ratepayers in, adding it was a process it would have preferred not to go through.

"Regretably, now that we have this information, we have an obligation to pursue the outstanding charges," he said.

On Friday, Barilaro said he was disappointed with the council's decision to charge ratepayers for ''their own error''.

He said the supplementary notices that had been issued by the Queanbeyan Council should be cancelled and the council should wear the cost.

"Prior to my election to the state parliament, I ran a timber business in Queanbeyan, if I had incorrectly undercharged our customers for a product, that would have been my error and it would be unthinkable to retrospectively hit a customer with a supplementary notice," he said.

Mr Barilaro said he was seeking advice from the Department of Local Government and the local government minister to check the council's move was in accordance with the Local Government Act.

But Mr Chapman said the council had received legal advice that the supplementary notices were within the Local Government Act. He was disappointed by Mr Barilaro's comments.

"I don't think Mr Barilaro has made contact with council officers to talk through issues," he said. "Reiterating the fact that the original undercharging was not meant to be a windfall for some residents, while other residents have been required to make the proper rates and charges. And the fact we've offered a very generous repayment period means that in most cases it's not an onerous burden on those ratepayers."