Residents connected to the Otama water scheme have been issued with permanent boil water notices.
Gore District Council 3 Waters asset manager Matt Bayliss said the council had launched an urgent investigation into ways of disinfecting the water supply.
The notice was the result of a catchment assessment that indicated a very high risk of microbiological contamination, he said.
“There is no contamination at the moment but there is a high potential for the water to become contaminated.”
Weekly water quality testing had not come back positive for E coli or any other form of contamination, he said.
The assessment was carried out by Opus International as part of a water safety plan for the scheme, put in place because the majority of customers use the water for domestic purposes even though the primary purpose of the scheme is to supply stock, Mr Bayliss said.
“They provided advice to issue a boil water notice.”