A Rotorua night shelter forced to close its doors at the weekend is thinking of re-opening because too many people need the service, despite the warning of a $200,000 fine.

Earlier this month it was revealed shelter workers were forced to shake people awake every half-hour in order to comply with council while waiting for consents. Now it has been forced to shut its doors.

Shelter founder Tiny Deane says all he wants to do is to help homeless people. It opened just five weeks ago and Tiny says about 50 people had used it.

He wanted to offer people sleeping rough in the city a place to stay but opened without consent for change of use, and without fire and earthquake reports.

"Technically I should have got the consent but if I waited, that young fulla could be dead now."

It was close to freezing in Rotorua overnight and Tiny says he had changed his mind.

"To tell you the truth I might just open back up and they can go jump.

"Hopefully we get it all sorted in the next week. I'll give it a week anyway, so I've got half of them living at my house, but all the rest have gone out and are out there in the cold."

Tiny says he was told by the Rotorua Lakes District Council on Saturday he could be fined $200,000 if he continued to let people sleep at the shelter.

Councillor Merepeka Raukawa-Tait couldn't confirm if the council had raised the prospect of a fine but says she would not be happy if they did.

"I would jump up and down if the council entertained that because I think that would be a dopey idea.

"That would be unfair, unnecessary and absolutely too heavy-handed.

"We've got someone who wants to do something, who wants to do well, he's not experienced in this area of work - so what. He is doing what he can and we should be doing everything to assist him."

Earlier this month, Rotorua Lakes Council group manager Māori, Gina Rangi, says fire and building consents were being rushed through so people could sleep at the shelter.

She says Tiny had agreed the shelter would not be set up as dormitory-style accommodation.

"What we had agreed with Mr Deane is that it could operate as a drop-in centre so people could have shelter from the weather. That did not include sleeping facilities because there are concerns about whether the building is safe."

She says letting the homeless people sleep all night posed safety hazards.

A recent head count of rough sleepers in Rotorua found 48 and at least 36 people and families housed for the night by government and community agencies.

Lifewise provides support for the homeless people in the city.

Lifewise chief executive Moira Lawler says there was a real need for shelter.

"I know that people on the ground want to respond quickly and with big hearts to make something happen, I really get that, but we also need a strategy to understand how we ensure we can be effective over the long term."

When asked about the future of the shelter and whether it should be re-opened, Moira says that's up to Mr Deane.