Water scientists say they have no doubt farming is the biggest factor in lake pollution.
Federated Farmers is disputing a National Institute of Water and Atmospheric Research report that a third of lakes are heavily polluted, mostly because of nitrogen run-off from pastoral land.
Federated Farmers' dairy chairperson Lachlan McKenzie says agriculture is a contributor, but the report shows natural processes have caused more of the deterioration.
But institute chief freshwater scientist Clive Howard-Williams says farming is definitely the biggest cause, especially in lowland areas.
Dr Howard-Williams says half of lowland lakes are polluted and they are in the most heavily farmed regions.
The Government is concerned by the report's findings and says it has ambitious plans to improve lake water quality.
The institute monitored 112 lakes between 2005 and 2009 and found 44% are unhealthy. It estimates almost a third of the country's lakes are in a poor state and says more are deteriorating than improving.
Environment Minister Nick Smith says the Government is increasing its spending on freshwater clean-up initiatives. It is also consulting on more than 50 proposed changes to improve water quality.
The Green Party says the Government needs to introduce a national policy on freshwater management quickly. Dr Smith says that will be implemented early next year.
The Greens say the report shows strong regulations need to be introduced to force farmers to act responsibly.
Co-leader Russel Norman says the report clearly linked the deterioration in lakes with nutrient enrichment from livestock farming.
Dr Norman says voluntary measures have been in place for a long time but need to be made compulsory to keep bad farmers in check.