The forum was set up to advise the Government on freshwater issues, and has a diverse membership of scientists, business groups, environmentalists, recreationalists, and iwi.
The Federated Mountain Club's decision to withdraw could be embarrassing for Environment Minister Nick Smith.
Speaking in Parliament this week, he said important environmental groups like the Mountain Club and others remained members of the forum and did not share the views of Forest and Bird.
Three days later, the Federated Mountain Club informed him that it would be quitting.
It still has 54 members, including several environmental organisations, not including central and local government observers.
Green Party water spokeswoman Catherine Delahunty, however, said it had become untenable for environmental groups to remain in the forum.
"It is supposed to represent all those with an interest in water in this country, from industry to environmentalists.
"But the balance is tipped too much in favour of industry," she said.
Environment Defence Society chief executive Gary Taylor - whose organisation is a member - said Forest and Bird's withdrawal in particular would hurt the forum.
"But there's still more than 60 entities left, all of whom remain staunch on the recommendations around the key issues [on freshwater] that are still controversial.
"So we figure that we're better off defending the forum's consensus with that weight behind us than jumping out and trying to be a solo voice."
