Three of Nelson's biggest companies are fighting a move by Tasman District Council to increase their water rates by more than $1 million a year.
The Tasman District Council has told the Alliance Nelson meat works, the ENZA fruit exporter, and Nelson Pine Industries their total water rates will go up next year from about $360,000 to about $1.3 million.
The council says the trio is part of the so-called Tasman water club and should be paying the same as others.
However, the companies say their water is from their own scheme which they paid for 18 years ago, and say they shouldn't have to pay for residential schemes they don't use.
An arbitrator has been called in to resolve the conflict.