Canterbury Regional Council is standing by its decision to allow two bottling companies to export water, despite a case going against it at the High Court in Christchurch today.
The court has ruled that the process followed by the council was wrong, and will next year consider whether their resource consents were granted illegally.
Cloud Ocean Water and Rapaki Natural Resources have both set up operations in the Christchurch suburb of Belfast - Cloud Ocean on the premises of an old wool scour, Rapaki at the site of an old freezing works.
The Canterbury Regional Council then transferred the consents that came with the properties to take water from the aquifers to the companies, but campaign group Aotearoa Water Action (AWA) felt this was wrong and asked for a judicial review.
Spokesperson Peter Richardson said water bottling was a completely different activity, with different impacts, to the operation of a wool scourer and freezing works.
The High Court today ruled in favour of AWA, concluding that the old industrial consents could not be relied on to carry on water bottling.
The decision does not mean that the water bottling consents are cancelled, but Mr Richardson said it paved the way for a hearing on that issue in the new year.
He said AWA were delighted with how today's hearing went.
Canterbury Regional Council said it stood by its decision to transfer the existing industrial resource consents.
Spokesperson Catherine Schache said the ruling relates to a minor point of law, and they won't know the true implications of the court proceeding until the second hearing on the matter next year.
"We have absolute confidence that the way we processed these consents was appropriate, and our decision to grant the consent was in accordance with the law... we have every confidence that's the decision the court will reach as well," she said.
For now, both bottling companies are able to continue taking water and a spokesperson for Cloud Ocean Water said the company has since obtained a new consent expressly for water bottling.
The spokesperson said Cloud Ocean Water had invested nearly $60 million in the plant, creating 200 jobs in Belfast.
But Mr Richardson from Aotearoa Water Action said the High Court decision was significant given the number of "under-utilized" sites and resource consents around New Zealand that bottling companies could take advantage of.
He said substantial increases in the amount of water taken under existing resource consents could put community water supplies at risk.
The decision comes days before a commissioner is due to decide if Cloud Ocean Water's request to take water from a second, deeper bore should be publicly notified.