The ousting of the Canterbury Regional Council chairman has coincided with revelations that the Auditor-General is investigating a possible conflict of interests by some councillors.
Sir Kerry Burke was removed by eight votes to six at a council session on Thursday.
The former chairman supports charging large water users a water management fee, a move the council's rural members opposed in a recent vote. Three of them are being investigated by the Auditor-General for a possible conflict of interest.
Sir Kerry and his supporters say disagreement over the water issue was behind his removal, but councillors who voted against him say that had nothing to do with it.
They say he needed to go because the Canterbury community, its leaders and the Government had no faith in his leadership.
The resolution was moved by rural councillor Mike Oldfield and seconded by rural councillor Jo Kane.
Alec Neill was elected chairman on Thursday, also by eight votes to six, which Sir Kerry says indicates the council will continue to be divided.
Sir Kerry's supporters said the "back room coup plotters" had behaved disgracefully and the leadership battle was all about water.
Before the vote, he rejected an accusation of a failure of leadership on water management and said he believed the council had succeeded in balancing a range of competing interests.
Irrigation New Zealand's chairman Graeme Sutton, says farmers have been frustrated over the time the council it takes to process consents, and hopes there will now be better leadership on water issues.
Ten Canterbury mayors had written to Local Government Minister Rodney Hide saying they have serious concerns about the council.
Sir Kerry said the mayors had been devious and should have brought their concerns to the council first.
In August, eight of the 14 councillors supported a vote of no-confidence in Sir Kerry Burke, claiming that he lacked leadership, credibility and was too focused on Christchurch.