Attorney-General David Parker gave assurances on Wednesday that all drinking water will meet the minimum safety standard.
However he would not say if he would enforce universal treatment, which he noted would be controversial and costly, especially for smaller suppliers.
Universal treatment is one recommendation of a Government inquiry, released yesterday , into the outbreak of water-borne disease in Havelock North last year, which saw a third of the 15,000 residents fall sick and was linked to three deaths.
The inquiry slammed local councils and the Health Ministry - which are usually responsible for safe drinking water - detailing "widespread systemic failure" and inept enforcement that failed to improve, even after the Havelock North crisis.
It has prompted outrage, with Green's co-leader James Shaw calling it a "disgrace" and "unconscionable" that New Zealanders could fall sick or even die from drinking tap water.
The inquiry said outside of Auckland and Wellington, at least 721,000 Kiwis - and possibly hundreds of thousands more, including tourists - were drinking water that was "not demonstrably safe", leading to estimates of 100,000 people suffering from water-borne diseases each year.
Health Minister David Clark sought to allay public fears, saying that the water people are drinking today is the same as they were drinking yesterday.
The Government has written to mayors and DHBs around the country, urging them to check water supplies as it urgently considers the inquiry's 51 recommendations, including stronger laws and regulations to enforce standards.
The inquiry panel has called for the entire country's drinking water be chlorinated immediately ahead of legislation changes.
It said exemptions to permanent chlorination could be made, but only in "very limited circumstances".
Clark will bring recommendations to Cabinet before Christmas.
"These findings point to a widespread systemic failure among water suppliers to meet the high standards required for the supply of safe drinking water to the public," the inquiry said.
"There is currently no adequate or effective enforcement of the statutory obligations on water suppliers."
Parker said the Ministry of Health, as well as local authorities, had "effectively failed" New Zealanders.
"In the last five years there have been no compliance notices issued by the Ministry of Health, and no enforcement action taken against any local authority that has been failing to supply water in accordance with the standards."
The Government has yet to decide how much money it would commit to ensuring that all drinking water is up to an acceptable standard, Parker said.
"Traditionally providing drinking water has been a primary responsibility of councils and we don't see that as changing, although it is true that some of the smaller populations, if left alone, won't be able to afford to do it, so we're going to have to work through that."
Christchurch is the largest New Zealand city to have unchlorinated water, drawn from aquifers and piped directly to homes. Treating the area's water supply would cost $100m-$150m.
Christchurch city councillor and Canterbury DHB member Aaron Keown told Newstalk ZB's Larry Williams chlorination would "go down like a bucket of sick" and would provoke protests in the city's streets.
But Water New Zealand's John Pfahlert said while aquifer water may start out pure, the reticulation system used to get the water to houses could introduce cross-contamination.
Chlorination was "the cheapest, most effective means of ensuring public health that you can get", Pfahlert told Williams.
"It's been around for a century. Effective drinking water treament is a well proven technology and if you get the dosage right you shouldn't even be able to taste it in the system."
The inquiry viewed the latest data for 2016-17, which showed that the 721,000 people drinking potentially unsafe water was "a significant underestimate".
Hundreds of thousands more may be exposed to poor drinking water, considering that the figure does not include about 625,000 New Zealanders that drink water from self-suppliers or temporary suppliers, nor does it include tourists that visit non-compliant townships.
Punakaiki, for example, sees 500,000 tourists a year and is a permanent "boil water" notice.
The Director-General of Health Chai Chuah told the inquiry that the figures were "very troubling", while the ministry's leader of the drinking water team Sally Gilbert said that the figures "raise flags" and that the ministry needed to "strengthen [its] advice in this area".
"The inquiry considers such a limp response does not go nearly far enough," the report said.
"Twenty-seven supplies failed entirely to take any remedial action after a transgression. In the aftermath of the bacteriological outbreak in Havelock North, these failures to respond effectively to transgressions or to monitor adequately are surprising and unacceptable."
The inquiry sheds new light on Chuah's announcement this week that he will resign halfway into his five-year term. It follows a State Services Commission report critical of the Health Ministry's performance, and the establishment of an independent Ministerial Advisory Group.
National leader Bill English said he supported the inquiry's recommendations so that every person had access to healthy water.
But he added that local communities may resist universal treatment.
"There's a lot of people that drink untreated water they regard as safe."
The issue was debated in the House this afternoon, with Green Party co-leader James Shaw saying it was "unconscionable" that people lost their lives and thousands fell ill "because they drank a glass of water".
"It is an absolute disgrace, what happened to the people of Havelock North. All New Zealanders should be able to trust the water that comes out of their taps, and we should not live in fear of it.
"We cannot allow what happened to the people of Havelock North to happen again. Ever. Anywhere."
Former Associate Health Minister Peter Dunne said he put forward a $15 million bid in Budget 2017 to upgrade water supplies.
"Treasury rejected it as unnecessary spending. The chickens are coming home to roost now," he said on Twitter.
What to do:
• Concerned people on a town supply should contact the local supplier, usually the local council.
• For people on self-supplies, such as roof water, information can be found here.
• General information can be found here.
• If you're in any doubt, boil your water before drinking.
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