THE Tweed business community is fuming over Mayor Katie Milne's push to boycott all local businesses associated with the Tweed Valley Hostpial project.

Cr Milne has called an extraordinary meeting for council to discuss potentially boycotting local business or contractors working on the new $534 million hospital at Cudgen.

Preliminary works began at the site yesterday, where about 100 protesters gathered as trucks arrived to erect fencing.

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Tweed Chamber president and Councillor Warren Polglase said the mayor's move was a direct attack on local businesses, contractors and workers.

"Cr Milne is playing politics with people's livelihoods and people's jobs, and all because they want to be part of building a new hospital,” Cr Polglase said.

"We should be celebrating and encouraging the use of local businesses and contractors on major infrastructure projects in the Tweed, not threatening them and sending money out of our community.

"As advocates for businesses in the Tweed, we wholeheartedly oppose any move which seeks to penalise law-abiding businesses from benefiting from investment opportunities in the local area.

"We want a strong and vibrant business community which is why Chamber is calling on Cr Milne to abandon her tirade against local businesses.”

Cr Milne, who attended the protest yesterday, has continued to oppose the Cudgen site since the NSW Government announced the location in April.

The mayor has said she believed the hospital should stay at Tweed Heads.

A date is yet to be set for the Tweed Shire Council extraordinary meeting.