The Government is putting on hold a scheme that grants money to small communities to upgrade their drinking water.
The subsidies target communities of fewer than 5000 people and an allocation of $117 million was made in 2006.
Some $30 million has been paid since then and $27 million is earmarked for a current round of subsides.
Health Minister Tony Ryall says the review is because of concerns the scheme operates on a first come, first serve basis.
Applications already lodged will be considered under current criteria. Mr Ryall says the review should be ready early next year.
Labour says many small communities will now have to wait even longer for improvements.