Locals are avoiding taking to the water in Waikato River and Lake Whakamaru, northwest of Taupō, as algae has turned the water green.
A number of people have posted pictures of the green water and raised their concerns on a Facebook group called Upper Waikato River Health.
The lake's levels and inflows are managed by power company Mercury.
In a statement, Mercury said their hydro lakes provide an environment for algae blooms when water quality issues combine with warm, settled weather. But none of Mercury's operations add contaminants that increase the presence of blooms.
"I just noticed the lack of wakeboarding and swimming in the lake" - David Tewavas
Taupō Mayor David Trewavas visited the lake on Tuesday and said it was not very attractive.
"I think it's a combination of the beautiful hot weather we're having in the central plateau and no wind and stillness, it just looks like it needs a good flush out to me."
Green water in Lake Maraetai in a picture taken from Lake Road, Mangakino on 7 January 2024.
Mercury could open the hydro gates to flush the lake out but this would not work because it would just flush the algae further down, he said.
"I think the natural flow of the lake will take over and it'll get sorted," he said.
"We just need a little bit of wind, dare I say it, a little bit of wind and rain and the natural flush out will happen."
Lake Whakamaru did sometimes have this problem at this time of the year, but it was particularly bad this year, he said.
"When I went out to Mangakino on Tuesday I just noticed the lack of wakeboarding and swimming in the lake and it was a little bit of a concern to me."
There were still a lot of domestic and international tourists in the area but they were just not swimming, he said.
"They're still coming, that's for sure, and we still welcome them by all means."