Tasman District Council is considering forwarding a local bill to Parliament in a bid to gain access to Crown land for a large-scale dam.
The 9.6 hectares of Crown conservation land in the Mount Richmond Forest Park is administered by the Department of Conservation.
DOC had advised the council that a method for transferring the land through the Public Works Act was no longer available.
Tasman Mayor Richard Kempthorne said without the land, the dam would have to be reduced from the planned 13 million cubic metres to 1.5m cubic metres of water.
A local bill was now likely to be the best option for securing the land, he said.