The Wairoa District Council has been spending thousands of dollars a week cleaning up silt from its drinking water after a privately owned dam broke, its mayor says.
Wairoa mayor Craig Little said the council would be seeking to recover its costs.
Sluice gates at the Waihi Dam, owned and operated by network company Eastland Group, were only just fixed last week after being damaged before Christmas.
Mr Little said the silt has affected the district's use of the water in many ways.
"Someone's got to pay for what we're paying and it's not our ratepayers, because our ratepayers have not done this damage to the river," he said.
"It's as simple as that. Hopefully we can do it without going to a costly court case but let's see what happens. Watch this space, I guess."
Eastland Group said it had lines of communication with the council, and if it believed it had a valid claim then it needed to present it to the company.
It said it had received no substantiated claims.