Legislation to replace Canterbury's regional councillors with a panel of commissioners passed through its first stage in Parliament under urgency on Tuesday night.
Environment Minister Nick Smith told Parliament the decision is driven by a desire for better environmental and economic outcomes from the region.
During the fiery debate, opposition parties accused the Government of launching an assault upon democracy, rushing the change through Parliament without adequate consultation.
The House will continue to sit in urgency on Wednesday, so the legislation can be passed in its entirety.
Dr Smith says the move is critical in order to manage Canterbury's water more competently, as water is to Canterbury what oil is to Saudi Arabia.
Acting Leader of the House, Simon Power, told Parliament it was appropriate to go into urgency to pass the legislation to provide certainty for councillors and staff.
Canterbury's 14 regional councillors were told their roles as democratically elected councillors will end in 1 May, when they will be replaced by a panel of commissioners led by Dame Margaret Bazley.
The move follows the Government's review of the council's management structure, in particular how it manages water issues in the region.
A Christchurch city councillor has already sought an investigation of the review.
Sacked over phone
Regional councillors were given the news on Tuesday morning via a telephone conference with Dr Smith and Local Government Minister Rodney Hide.
The panel will decide how to manage water, either by setting up a new unitary authority or a Canterbury water authority.
Dame Margaret met the regional council chair and chief executive on Tuesday afternoon to start the handover process.
She says she was approached by the Government several days ago, and will be one of up to seven commissioners on the new panel.
Smith, Hide explain
Dr Smith says the move is driven by a desire for better environmental and economic outcomes from Canterbury.
"The problem in Canterbury is that you've got big forces - dairy forces, Meridian - big players competing for water and you've got a weak divided referee, highly split council. They keep deferring decisions, they make no decisions and the problem gets worse and worse."
He says the Government's goals for Canterbury can only be achieved with better management.
Mr Hide says the decision was the toughest he has made since becoming a Minister.
"It's a tough decision ... because you are replacing elected representatives on a local government through parliamentary legislation, and you're suspending the elections this year. But when you get that sort of feedback from across the board, it would be derelict for any government not to work to fix the problem."
Mr Hide says after talking with mayors, councillors and stakeholders in Canterbury it was clear drastic action was required.
Not democratic - councillors
Outgoing councillors say the move is anti-democratic, a call that is being echoed by the Green Party.
Canterbury regional councillors who have spoken to Radio New Zealand say the announcement has come as a shock.
They says the removal of the democratically elected panel of Cantabrians is appalling and residents will be shocked once they realise the effects of the Government's decision.
Councillor Jane Demeter says greed for water is behind the sacking, and the Government and Canterbury's mayors are trying to progress their own agendas.
Ms Demeter describes the decision as a move to place the ownership of water in the hands of an interested minority.
She says the dismissal of the council and the appointment of commissioners is a dagger in the heart of democracy.
Oversight gone - Greens
Greens co-leader Russel Norman says he fears the move is bad for democracy and water in Canterbury as it removes all democratic oversight.
"They've also taken away all the judicial oversight," he says. "The Environment Court will no longer have the right to oversee what the regional council is up to. They're going to appoint their mates as commissioners, and that will mean they will give out water rights to all of the big dairy corporations in Canterbury."
City councillor wants review investigated
A Christchurch city councillor has asked the Auditor-General and the Ombudsman to investigate the review that sparked the sackings.
Yani Johansen says the review was a farce, and the decision was driven by a Government more interested in economic development than environmental protection.
Mr Johansen says Canterbury's mayors are also to blame.
He says they complained about the regional council to the Government without the mandate of their councils, and the letter they sent to the Government criticising the regional council was based on personal opinion.