"This bill has the potential to see trout removed from local streams, the removal of a total ban on trout farming, it could see private land owners selling rights to fish from water ways on their land to the highest bidder and also see trout fishing become part of Treaty negotiations.
"Rotorua is a mecca for trout fishing and the hundreds of national and international anglers who come here inject millions into the economy. They are spoiled for choice with lakes, streams and rivers. This is under threat."
Coutts said the bill would also allow the Department of Conservation (DOC) to have all the say and revenue brought in by fishing licences.
He said Fish & Game was "owned" by the 110,000 people who paid to have a fishing licence in New Zealand, and was therefore the best organisation to look after freshwater fishing.
The Indigenous Freshwater Fish Amendment Bill was supported through its first reading and is now at Select Committee stage.
Waiariki MP Tamati Coffey disagreed the bill could have a catastrophic effect on Rotorua's international reputation as a trout mecca.
"Keep in mind that this Bill has passed first reading, supported by all the major parties - including National - and is now open for public consultation until October 25. Nothing is finalised at this stage."
Coffey encouraged people to get engaged and have their say on how native fish, such as whitebait, could be saved from extinction.
"The fact is, 24 of our 56 indigenous freshwater fish species are threatened with extinction. We need to act and we are, showing true kaitiakitanga by improving the protection and management of our marine whānau.
"With so many amazing lakes and waterways in our region, this is a long overdue opportunity for our rohe and I look forward to hearing the outcome of the public consultation process."
Rotorua Anglers Association president Gavin Corbett said freshwater fishing websites and social media sites had been full of commentary over the bill.
"There are very real concerns that trout fishing as we know it, could change dramatically. As I see it, the biggest threat will be the desire to protect indigenous fish over introduced species like trout.
"Up until now, DOC and Fish & Game have worked hand-in-hand but this bill gives DOC authority with a one-size-fits-all approach."
Corbett said he understood Fish & Game had commissioned a report from former Prime Minister and QC Sir Geoffrey Palmer on the bill.
In his report, Palmer said he thought the bill's regulatory impact statement was not entirely accurate when it said the "reforms being proposed do not directly impact sports fish but will effectively manage some threats to sports fish".
His report states aspects of the reforms impact directly and negatively on Fish & Game. Others have the potential to impact on sport fish.
Rotorua MP Todd McClay said the bill provided "higher protection" for indigenous fish, which was required.
"I have been contacted by a number of extremely concerned anglers who believe the bill demotes trout to a lesser species that other fish species and that trout may be removed from some lakes, rivers or streams in Rotorua.
"While National supported it at its first reading, we will now go back to the caucus to determine what we do next."
Consultation on the bill is now open and freshwater anglers who fish in New Zealand have been asked to voice their concerns to local MPs and to make submissions to the Select Committee.
Eastern Fish & Game manager Andy Garrick and DOC declined to comment.
Aims of the Indigenous Freshwater Fish Amendment Bill
• Improve the workability of fisheries management tools in the Conservation Act.
• Fill gaps in the regulation-making powers relating to freshwater fisheries management, including to provide regulation-making powers relating to all matters in the Freshwater Fisheries Regulations 1983.
• Repeal some 1983 regulations which have been superseded by more recent provisions in the Act.
• Remove some provisions relating to the protection of fish from the Freshwater Fisheries Regulations 1983 and provide updated provisions in the Conservation Act.
• Provide protection for fish within conservation areas.
• Ensure that the relevant provisions in the Act are efficient and accord with modern legislative design and drafting standards.
• Improve the relationship between management of fish under the Conservation Act, the Fisheries Acts, and Treaty settlement legislation.
Concerns raised
• Give Freshwater Fisheries Management Plans prepared by DOC priority over the Sports Fish and Game Management Plans prepared by Fish & Game.
• Allow Treaty settlements to override several important elements of the sports fisheries management regime.
• The ability to revoke existing regulations in the Freshwater Fisheries Regulations 1983 that expressly require the consent of Fish & Game Councils before fish can be transferred or released in their area of jurisdiction.