The Napthine government has closed a loophole to prevent billionaire trucking tycoon Lindsay Fox from building on a large stretch of Portsea beach he now owns.
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Under changes to a planning zone, development on privately owned beaches can now only go ahead with state government approval.
"The Victorian government will not allow public-accessed beaches to be built on where the land is technically held in private ownership," Planning Minister Matthew Guy said.
"Public conservation and resource zones will now be safe from private development."
Mr Guy said the government was also examining legislative changes to clarify title boundaries along Port Phillip Bay, to ensure Victoria's coastline remained in public hands.
It follows a controversial Christmas Eve decision by the titles office, revealed in The Sunday Age, to extend the boundary of Mr Fox's cliff-top Portsea property by 45 metres onto Point King beach.
It is understood the government is confident it can reclaim the 2400-square-metre parcel of land from Mr Fox.
But any move to claw back the land could meet fierce opposition from Mr Fox, who has threatened to defend the titles office's decision in the High Court.
The state government is likely to introduce legislation this year to clarify the high water mark, which would have a retrospective effect but would not be deemed retrospective legislation.
Changes to the public conservation and resource zone gazetted on Friday will mean development cannot occur in the area without a permit from the Secretary of the Department of Environment and Primary Industries.
Without the reforms, Mr Guy said fences, signs, flagpoles, sheds, pergolas, verandahs, decks and outdoor furniture could be built in this zone without a planning permit.
"This is an appropriate planning response while the government works on the complex legal process of resolving the issue involving defining a boundary such as the high water mark."
The government is under pressure to resolve the issue quickly to prevent the titles office being bombarded with similar requests.
Despite setting a controversial precedent on December 24, the titles office has not received any new applications from coastal land owners wanting to extend their properties onto the beach.
"There needs to be contemporary legal clarification around titles boundaries around Port Phillip Bay," Mr Guy said. He said about six landowners held sections of Victorian beaches and would be affected by the change.
