Clowns tossing handfuls of lollies from buckets are treated as a hazard in the health and safety plan filed with the council by event organiser Dale Wallace, who is arranging her ninth Santa parade.
"People ask me if they can walk down beside the crowd handing them out but we are very careful how we do all that," she said yesterday.
"I manage to get family and friends dressed up as clowns and we have 12 people who know what's required and they only give them out to the little ones and hand it to them.
"Kids absolutely love it. When you are a kid, the highlight is getting lollies."
Mrs Wallace is now writing letters to 60 float operators asking them not to throw water bombs or use water pistols.
"It's a major hazard and last year two floats had water cannons and were drenching spectators.
The victims included guests of honour Mayor Len Brown and local councillor Penny Webster.
"Everybody gets involved and we all have fun," said Mrs Webster, who has written to the council's events manager David Burt to complain about the rules.
Asked about the bans, Mr Burt said they were adopted at the request of health and safety advisers.
"It comes down to some elements of common sense that even if you have a slow parade up the main street and there's Santa and pixies and fairies throwing lollies out, kids are going to run and get them.
"The advisers' view is to stop any risk to a kid - and it would be awful if a kid got run over - and allow people to enjoy the float and the parade and if you want to have a lolly scramble you park and from a stationary truck, Santa throws the lollies out.
"It's a safe, commonsense approach to it."
Mr Burt did not know whether the ban was based on evidence of accidents or the advisers were being "risk averse".
Organisers say the rules were prompted by the Health & Safety in Employment Act. Blockhouse Bay Santa Parade organiser Jan Pitout said: "The lolly scramble will never be the same but we have to comply with these regulations because it only takes something to happen.
"But I was upset about no water squirting. It's never hurt anyone and the crowd love it."
The Herald asked Walnut the Clown aka Michael Colonna, for his opinion.
"The kids love my squirty flower even if I aim to miss, it's just as funny.
"The water is about surprise ... I went to squirt a police lady and she stuck out the car window a really big water pistol and got me big time.
"The people making these rules are taking out the surprises and we are becoming a society that is unused to anything different."
Santa Parade rules
* No throwing lollies or gifts to children. Handing them to children is okay.
* No wetting people, with pistols, bombs and cannon.
* Drive floats at walking pace only.
* No passengers under 5 years old.
* No gymnasts doing cartwheels among animal droppings.