Residents in the town of Raetihi are preparing a group-action insurance claim over a diesel spill that forced the closure of the town's water supply last year.
The supply was contaminated in October when 15,000 litres of diesel leaked into the Makotuku stream in Tongariro National Park from a tank at the base of a skifield run by Ruapehu Alpine Lifts.
Residents were without drinkable tap water for almost three weeks until an alternative supply from the Makara stream was able to be put through the reticulated water system.
A lawyer representing the residents, Jeremy Nash, said a questionnaire gauging how locals were affected has shown grounds for a claim against the skifield's liability insurers.
Mr Nash said Ruapehu Alpine Lifts employs many locals, and the claim is not a move against the company itself. He said the claim will be negotiated with Ruapehu Alpine Lifts and insurers, and will stay out of the courts.