Hurunui's Mayor believes the Government's criteria is too tough for businesses who want additional earthquake recovery support.

Owner of Waiau Lodge Hotel, Michelle Beri, was denied a Future Kaikoura Business Recovery Grant because she did not have a good enough business case going forward.

She says she doesn't have the $10,000 dollars to pay for engineers to meet the criteria.

It's left the her with limited options to re-open the business.

Mayor Winton Dalley said said there's been criticism that the tough criteria could rule out most Waiau businesses.

He said they've already lobbied successfully to relax the criteria.

But, he said it could still go further.

"Ideally if the criteria relaxed a little more it would make it a little more comfortable for some of the businesses that are really struggling."

Kaikoura's MP National's Stuart Smith is defending the process, saying it's taxpayers money..

"We have to be very careful that we are actually handing it out in the right way and we're following correct procedures and that they are actually meeting the correct criteria."

Smith has offered to help Ms Beri with a reapplication.