Agriculture minister Damien O'Connor says the Waimea Dam project needs to go ahead because "they need the water".
The Tasman District Council last week voted against the project, a decision met with widespread disappointment from the rural sector.
O'Connor told The Country's Jamie Mackay today: "Yes there is a cost of course to ratepayers, but actually the irrigators are bearing a big part of the cost."
"I think the process hasn't been handled well for probably the last 10 or 15 years to be honest. It's a bit unfortunate. It's a sad outcome," O'Connor said.
Mackay asked why the Government didn't contribute to the project through Regional Economic Development Minister Shane Jones' Provincial Growth Fund.