Residents in the small North Canterbury town of Oxford may have to boil their water for up to a year because the Waimakariri District Council doesn't have confidence in the current water supply.
Since E coli was detected in part of the water supply last month council staff had been undertaking extensive testing, but the source of the contamination hadn't been found, the council said.
"We have inspected the headworks, reservoirs and several connection points but no potential source of contamination has been identified," it said.
The council has not been able to gain the required levels of confidence to lift the boil water notice, it said.
It is now likely that the notice will not be lifted until a new water source, currently under development, is completed.
Work is expected to take 12 months but the council said it was looking into ways to fast track the project.
Fresh drinking water is available for residents at the Oxford campervan filling point on High Street.
A public meeting has been planned to give residents more information and the opportunity to ask questions.
It will take place at the Oxford Town Hall on Tuesday 20 February 2018 from 7pm to 9pm.