A man has been charged after allegedly trying to use counterfeit currency at a hotel in Warners Bay yesterday.

The man entered the hotel on Lake Street shortly before 2pm on Tuesday 12 May 2015 and allegedly attempted to pay for an item with a $50 note.

The employee refused the note as it was of poor quality and the man left the hotel allegedly discarding several notes outside.

These notes were retrieved by patrons and handed to staff members who contacted police.

A short time later police from Lake Macquarie Local Area Command attended and seized the currency.

Officers then spoke to the man and several associates who were in another section of the premises.

The man was eventually arrested and conveyed to Charlestown Police Station where he was charged with possess counterfeit money and utter counterfeit money.

The 22-year-old Mayfield man was refused bail to appear at Newcastle Local Court today.