Residents in the central North Island town of Raetihi may have to wait until next year before they have tap water that's safe for drinking again.
Locals were told there could be diesel residue in the town's water supply for more than three months at a packed public meeting at the town's Cosmopolitan Club on Tuesday night.
However, Ruapehu mayor Sue Morris says she's remaining hopeful the water will be safe for drinking by Christmas.
She says the community has rallied since the contamination.
Raetihi has been without water from its main source, the Makotuku Stream, for a week, after diesel spilled from a tank at the Turoa skifield.
The Ruapehu District Council says water could be restored in the next week but only for flushing the toilet.
The water supply will then be made fit for bathing and laundry, before it becomes safe for drinking.
Ruapehu Alpine Lifts chief executive Dave Mazey says the company's reputation has taken a hit because of the incident.
He says it will investigate how to avoid it happening again.