Council staff have asked for more time to continue their investigation of the smell, which in February prompted a petition signed by 93 residents seeking a solution.
About 20 homes in the area were believed to rely on septic tanks, and some residents claimed the contents were finding their way to the foreshore and causing a strong smell.
They wanted homes in the area to be connected to the city's reticulated wastewater service, which ran past the area to homes in Port Chalmers and Sawyers Bay.
However, speaking at a meeting of the council's infrastructure services committee this week, council water and waste services manager John Mackie said staff investigating the smell were "not assured" failed septic tanks were entirely to blame.
Marine bacteria, algae, decaying seaweed, or agricultural run-off from properties in the area could be contributing to the smell, as could odours escaping from vents in the council's own wastewater pipe, he said.
More work was needed to establish "the root causes of these odours", including a full investigation of the performance of septic tanks in the area, he said.
The developments followed the council's adoption of a new reticulated utility services policy in February this year.
The policy established a framework for adding existing developments to the city's reticulated services network where there was a demonstrated need, such as to protect public health or the environment.
In March, the committee approved a feasibility study on extending wastewater services to Blanket Bay, following repeated pleas from residents.
Council appraisal engineer John Porter said, in a report to this week's meeting, a study of the area's water catchment had found water quality was poor.
However, connecting seven properties in the area to the city's wastewater service had been initially estimated to cost $300,000, and more investigation of septic tanks was needed first.
It was possible the repair or upgrade of existing tanks would be a preferable - and more cost-effective - option, he said.
Following discussion, councillors voted to widen the investigation to include rural residential properties at nearby Curles Point, located about 1km away, after Chalmers Community Board chairwoman Jan Tucker said both areas had been "left out" of city services.
"I think it's really time to address both of them," she said.
The study's results would be presented to a subsequent infrastructure services committee meeting.
