Far North District Council is warning residents to be weary of the water they buy to replenish rainwater tanks as they believe their supplies may be being siphoned and sold untreated.
The council said today there was "strong evidence" water had been taken from the council's Okaihau and Rawene supplies.
They believe the thefts were probably made using a fire hydrant.
"This is potentially a serious public health issue," the council's infrastructure and assets manager Jacqui Robinson said.
"Our fear is that those taking water from council may also be taking water from streams and selling it as treated water.