The High Court has upheld an appeal to the Board of Inquiry decision on the Ruataniwha Dam and ordered the board to reconsider its final ruling.
The High Court decision said the board would have to reconsider its terms of consent for the Ruataniwha water storage scheme and the management approach, to ensure farming practices in the Tukituki catchment would be managed to protect river health.
The court ruled there was an error of natural justice in that new evidence was presented following the close of the Board of Inquiry hearing earlier this year but not all parties got to consider it.
A Fish and Game spokesperson said the ruling was likely to further delay a final decision on the $600 million water storage project.
Forest and Bird's Kevin Hackwell said it was an excellent decision because it meant water quality would be improved and communities consulted.
"A signal which is really good really good about this decision is that it sends a clear signal to all regional councils that when they're doing their regional plan for water and land management that they must include methods that ensure that agreed water quality limits will be met."