|Cornwall Council will consider the plans on 11 April|
The Youth Hostels Association (YHA) wants to install a £250,000 system to discharge wastewater on to Treyarnon Bay.
It said clear, sterile water would be discharged and there would be a back-up system in case of error.
Some residents have said it will affect business. The plans will be considered by Cornwall Council in April.
YHA, which has been in the area for 60 years, said the current system was defective and the proposed system would carry treated sewage from the hostel down to the cave on the beach.'Contaminated' beach
Jake Chalmers, YHA property director, said: "It will actually discharge at night into a cave just on the property's boundary line and it's designed to be done at high tide when there's no possible disruption.
"We've taken the best advice we can from our own consultants, from the statutory bodies including the Environment Agency, and they've all said this system is totally appropriate."
But resident Sam Henwood, who lets holiday cottages, said: "There are many thousands of people that love this beach and I find it very sad that it will be even contemplated by the council.
"I don't think a treated sewage plant gets rid of certain things that are also flushed down the toilet and no one wants to see that."
Business owner Maud Old said: "It will affect our businesses. Who wants to come to the beach that's going to be contaminated?"
YHA said the alternative of running a pipe half a mile to connect to the mains sewer was not a viable option.
Mr Chalmers said: "I appreciate their concerns. All I can assure everyone is if we thought and believed that this would detract from the area we wouldn't be doing it."
Source: BBC News