Farmers backing the Ruataniwha dam plan have welcomed the Hawke's Bay Regional Council's provisional decision to invest $80 million in the project.
The decision is conditional on councillors being satisfied with the business case.
But Hawke's Bay Federated Farmers' president Will Foley said there were more hurdles to jump before farmers could commit themselves to taking irrigation water from the scheme.
The biggest hurdle was the final decision of the Board of Inquiry, due out this week. It gave draft approval for resource consents to be given to the Ruataniwha dam but it also introduced limits on nitrogen leaching into waterways.
Mr Foley said farmers hoped the board would amend the limits it set, which it regarded as far too restrictive.
"At the levels they had set, we're above their levels with just what we're doing now, so basically we're going to have to reduce what we're already doing and so there was no way there was going to be irrigation water taken up and any intensification of agriculture at all," he said.
Farmers were holding off on signing up to the scheme until they knew the final outcome of the Board of Inquiry.
"And if there's a good result there, they'll have the confidence to sign up to water and that will certainly help the dam project go ahead, with just a couple more conditions, including the investors coming on board and finally the committed contract with the construction company."
Hawke's Bay Regional Council chairman Fenton Wilson said it had given a signal of its commitment and farmer commitment to take water from the scheme was also essential now, to bring in institutional investors.
"I think the institutional investors are still watching us pretty carefully here, so I'm confident that the extra funding will be forthcoming, but the community's got to do its bit now," Mr Wilson said.
"We've got to get commitment and signed contracts, unconditional, for a minimum 40 million cubic metres of water."