Councillors discussed the issue in closed session on Wednesday night and The Age believes a new candidate has now been selected but is yet to be formally announced.

Mayor Tim Overall confirmed yesterday that a locum, or stand-in, general manager would be appointed after Mr Chapman notified Council he'd be taking an indefinite period of sick leave. He's been away from the role since late August.

Councillor Overall said he couldn't comment on whether Mr Chapman would return to the position.

"Mr Gary Chapman has notified us of extended sick leave for the current period and Council is considering the appointment of a locum general manager during the period of Mr Chapman's absence," he said.

The issue comes at a difficult time for Queanbeyan City Council following angry backlash from ratepayers facing $3.7 million in backdated rates notices issued by Council in July. Affected ratepayers and members of the newly-formed Queanbeyan Ratepayers' Association have been critical of Mr Chapman for his role in issuing the backdates invoices, and protested outside an August meeting of Council, carrying signs calling for the general manager to be sacked over the issue.

Some Councillors, including Jamie Cregan and Brian Brown, have also been publically critical of the process followed by senior council staff in issuing the rates invoices due to the fact the matter came before Council in February as an information report only, which didn't require a vote of councillors to action it, nor contain a dollar figure indicating the scale of the backdated charges.

However Mr Chapman told ratepayers at an extraordinary meeting of Council in August that Council legally had no option but to issue the notices.

"The Council does not have the ability to not issue the rates and charges under the local government act; that's what makes this so difficulty for the Council," he said.

All Queanbeyan Councillors have since expressed their support for finding a legal avenue to write off the notices, and a decision of Council in August has placed the invoices on hold until a resolution can be found.

Meanwhile, one potential replacement being considered for the general manager's role, according to internal Council sources, is former Queanbeyan GM Hugh Percy. Mr Percy was Queanbeyan town clerk and general manager from 1988-2004, and was deputy to that role for the 15 years prior to that. He has also served on a number of local boards and is a former general manager of Parkhill Financial Group.

Mr Percy told The Age on Thursday that he hadn't been contacted in regards to filling the Queanbeyan GM position, but said he'd be open to considering it "on a temporary basis."

Mayor Overall said he couldn't comment further on the General Manger situation at this point, but it's expected Council will issue a statement in the coming days.