A group representing the water and waste sector says the current management system is failing and red tape is choking development.
Public health officials have warned that if the Local Government Amendment Bill is passed, less monitoring of water supplies could put lives at risk.
Canterbury's Medical Officer Of Health, Dr Alistair Humphrey, says removing the requirement for water supplies to be checked by doctors would be like scrapping warrants of fitness for vehicles and letting drivers do their own assessment.
Water New Zealand, which represents those involved in water management, says however that the current system is failing.
Chief executive Murray Gibb says that of the 2000 water supplies being monitored, about 700 are classed not fit for human consumption. Central coordination of water policy is needed, he says.