Water flow demands by Otago Regional Council would dry up an iconic river in the Maniototo every summer, a group of local farmers says.
The farmers say the demands are being imposed despite years of work by people who live nearby, but the council has rejected those complaints.
The Manuherikia River rises in mountains south of Omarama and flows into the Clutha River near Alexandra.
For generations, the Falls Dam - located a quarter of the way along the river - has captured water during spring rains and released it during summer droughts.
The aim was to equalise the flow of water along the Manuherikia downstream.
A $200 million plan is being developed to raise the height of that dam to capture still more water, and allow greater irrigation downstream.
Local farmers have for years been consulting groups such as Fish & Game and have produced a proposal to set water flows for the river beneath the dam at 1200 litres per second.
But a farmer pushing the project, Gary Kelliher, has accused the Otago Regional Council of ignoring that consultation and imposing its own range, from a minimum of 1250 litres a second to 2500 litres a second.
Mr Kelliher said that level of water flow was completely unrealistic and would drain the dam.
"The modelling we have done just on the existing dam says that if 2500 litres a second was chosen, that would empty the dam by January 4th," he said.
"And by emptying the dam by January 4th, you empty the river by January 4th."
The council had an obligation to produce numbers that were achievable, Mr Kelliher said.
Even the lower flow rate agreed after his consultation would need the existing dam to be enlarged, and a proposal to do that was still being debated, he said.
Farmers' work focused on irrigation, not fish and swimming - council
In its defence, the Otago Regional Council said it was well aware of the consultation already done on the river flows by Mr Kelliher and his group, but the law required it to follow set procedures in determining policy on water.
Senior council executive Fraser McRae said its flow level numbers were not final and were still up for consultation.
"We have done work with the farmers that are in that valley and we are currently working through with the wider community," Mr McRae said.
"A lot of the work that the farming community have done has been about guaranteeing water for irrigation.
"They have not been about in-stream values, for things like fish habitats, fish migration, swimming holes for grandkids and the natural character of the river itself."
Mr McRae said his organisation had to consult with all of the community, rather than favouring one particular group or section. While the farmers and those they consulted were major stakeholders in this process, they were not the only ones.
He said that whatever flow level was finally settled on, the aim of the whole exercise would be to make sure the river continued to flow at a sustainable level.
Adding a sense of urgency to the debate is that many of the water rights in the region date back to the gold rushes in the 1800s.
After the gold rushes were over, they were transferred or sold to nearby farming operations.
The Resource Management Act of 1991 replaced those indefinite rights with 30-year water rights, which will expire in 2021.
RNZ series Water Fools? - on air and online - looks at the troubled state of New Zealand's freshwater. Check out the full series http://www.radionz.co.nz/programmes/water-fools here].