Landowners in the Mangatarere Valley in Wairarapa say the Public Works Act may be used to forcibly acquire their homes for a private irrigation dam.
The Mangatarere site near Carterton is one of five being investigated by Wellington Regional Council but the council says private investors will build and own the large dam if it goes ahead.
Mike Bennet, who has a property in the valley, says they have been told their land could be taken using the Public Works Act, but he can't believe the Act can be used as a tool for private investors.
But Economic Development Minister Steven Joyce says the Act can be used for private interests if there's a wider public good.
He said shareholders who take the risk, get paid dividends, but in projects such as electricity, the wider community benefits.