Canterbury Regional Council has changed its mind about letting farmers lease out water permits without losing the right to keep them.
Canterbury-based water permit trading company Hydro Trader says it has been battling the council for more than a year over its policy of permits automatically lapsing after five years if they haven't been used.
Managing director Tony Davoren says the council's recent decision to allow leased-out permits to remain active is significant.
Dr Davoren says farmers in Canterbury will benefit from the decision, though other councils may take a different view, he adds, and the Government needs to be prepared to change the Resource Management Act to protect farmers in other regions.