The council approved the mosque in June last year, but protesters are again trying to appeal that decision.
Yelling slogans and calling Bendigo mayor Peter Cox a traitor, 80 protesters took over Bendigo's public gallery.
The heckling escalated until the city council meeting was adjourned and police were called.
But protesters say that was not their intention when they arrived.
Bendigo resident Julie Hoskin says the noise started when the group felt it was not being heard.
"Well, until Peter Cox disconnected the microphone and cut short question time again, everything was going relatively smoothly. Okay, that was the trigger. And he does that regularly, so people are just fed up with not having their voices heard. We served a notice of no-confidence in the council last night that went peacefully. And it wasn't until he did that again that that triggered the reaction of the residents of Bendigo."
At the centre of it all is the planned construction of Bendigo's first mosque.
Seven of nine council members approved the Islamic centre in June last year, and the council then won a legal challenge six weeks ago.
But protesters are now lodging a second appeal.
While the Mayor says the group has exercised its democratic right by lodging an appeal, he says the group's objections this time were not raised respectfully.
"It's moved from an issue around the mosque to the whole democratic process of council being able to deliver its business. So last night, we had a situation where we had our normal public question time and people started asking questions about rubbish and trees, and streets and whatnot, and then it got onto the mosque issue again. And the noise became so loud that we could no longer carry on. It was so disappointing that that democratic process broke down."
Victorian premier Daniel Andrews says he agrees the protests were not conducted thoughtfully.
"Our multiculturalism, our multifaith community, is our greatest strength. It's a great asset. And I can't understand why anybody would be protesting against people being able to express their faith, to celebrate their culture and the things that they believe in. I think they were ugly scenes, and they don't do Victorians any credit at all."
Councillor Cox says the building of a mosque would be what he calls a natural extension of Bendigo.
The local Islamic community agrees.
The Bendigo Islamic Association's Heri Febriyanto says the Muslim community is simply practising its rights.
"Aggression and the violence cannot be the Australian way. The majority of Bendigo supports us. Everyone has the freedom to practise their religion, and the Muslim (people) of Bendigo are also happy to be able to do this."
If built, the 3-million-dollar mosque would accommodate up to 300 practising Muslims, as well as international students from the nearby university.
The plan also includes a sports facility they hope the broader community would use.
The Victorian Supreme Court is expected to decide next week whether leave for an appeal will be granted.
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