"Implementing some but not others risks the loss of the consensus and the constituency for change that it has generated."
A national framework decided by the Government would set minimum objectives for the state of different kinds of water bodies.
It would also calibrate bands - fair, good and excellent - above those bottom lines indicating increasing levels of protection, to inform local decision-making.
Regional councils would be required to set limits on how much water can be taken and how much of each contaminant can be discharged for each catchment.
Where catchments are already over-allocated, the councils would have to decide the timeframe within which the limit is to be achieved.
The forum wants its own collaborative, consensus-seeking approach to be replicated at the regional level, saying it would lead to more resilient solutions and avoid more costly, drawn-out and divisive decision-making processes.
Iwi need to be involved at every stage of the process, it says.
A collective stakeholder group would thrash out a draft plan for the regional council, providing evidence in support of its decision and identifying any areas where it had been unable to reach consensus.
The council would notify the plan, call for submissions and appoint an independent hearing panel.
The independent panel would then mediate between submitters and the regional council and undertake a hearing "with Environment Court-equivalent rigour" on any matters which could not be resolved through mediation.
The regional council, with the involvement of iwi, would then make its final decision, explicitly explaining any departure from the consensus position of the stakeholder group or the hearing panel.
Appeals to the High Court would only be allowed on points of law, except when the Environment Court was satisfied the regional council decision did not give effect to the consensus position of the collaborative stakeholder group or would have material implications for a matter of national significance.
In setting objectives and limits councils should acknowledge uncertainty around the information available to them and err on the side of caution where there is the potential for irreversible environmental impacts, the forum said.
Limits, once set, must be binding.
Once a limit is fully allocated any further taking of water or discharges should be prohibited. An efficient allocation and transfer system was required, it said, and it will report further on that in September.
Environmental Defence Society chairman Gary Taylor, a member of the forum, said the consensus underpinning the latest report represented a lot of give and take on the part of participants.
"But the fact that it is an overall agreement means it should stand the test of time," Taylor said.
Primary Industries Minister David Carter and Environment Minister Amy Adams said they were impressed with the way the members, who represented very diverse interests, had worked together to tackle often highly contentious issues.
After receiving the third report later in the year they would be in a position to develop durable policies on freshwater management.
