High levels of potentially toxic blue-green algae have been found in Lake Tom Thumb, Eaglehawk.
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The abnormal levels were detected after routine monitoring.
Blue-green algae occurs naturally, but it can be harmful to humans and animals.
Members of the public have been advised by the City of Greater Bendigo to avoid contact with the water at the lake and animals should also be prevented from entering the water.
The council has advised that activities that do not involve direct contact with the water can still be undertaken but a level of care should be taken. The algae cannot always been seen in the water.
Those who come into contact with the water should wash their skin immediately with clean water.
City of Greater Bendigo’s manager of Environmental Health and Local Laws Susannah Milne said recent warm temperatures and a lack of rainfall had created perfect conditions for the algae blooms.
The blooms usually have a life span of a few weeks but favourable weather conditions could lengthen their life.
Ms Milne said anyone visiting the lake in the coming weeks should follow the warning signs.
At this stage it is unknown how long the blue-green algae blooms will disrupt the normal functioning of the lake.
Skin rashes, itchiness, sore eyes, ears and noses are all symptoms of contact with the algae. Consumption of algae infested liquids normally results in vomiting and nausea.