Coliban Water plans for upgrades to Kyneton Water Treatment Plant avoid future unlicensed water releases into Campaspe River

But one landholder says she is suspicious and upset, even after the water in the Campaspe was declared safe for domestic and stock use on Monday.

Coliban Water has flagged it is looking at ways to meet high rainfall and low rainfall scenarios as the weather changes

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The organisation released treated domestic waste water at dilution levels not consistent with its licence from its Kyneton Water Treatment Plant in May and June.

In June it began to release treated industrial waste water.

The Environment Protection Authority gave Coliban Water an exemption to its licence for the first release but not the second.

Coliban Water's acting managing director Neville Pearce said the driest conditions in 150 years, followed by heavy rain in June, meant the Campaspe River was very low, but lagoons at the plant were full.

Kyneton received about one quarter of its average rainfall in January, February and March. In April 2.8 millimetres fell, about six per cent of the average.

Mr Pearce said this forced the water treatment plant to release water into the Campaspe River without the required level of dilution.

The second release - of a poorer quality - came because the lagoons at the Kyneton Water Treatment Plant were full after the rain.

The EPA advised people to avoid drinking water from the Campaspe River, or using it for bathing, processing food or watering stock.

"When you've got really dry period and you get into June and you start getting some rainfall, all the ground and the surrounding environment is very dry," Mr Pearce said.

"The first rain you get all soaks into the ground and wets the ground, but you're still getting no flow in the river."

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Mr Pearce said Coliban Water would convert some lagoons to provide greater storage, and was installing aerators on top of lagoons.

He said Coliban Water was implementing upgrades, due by March next year. This meant it would not be forced to release lower quality water in 2020, even rainfall followed the same pattern as in 2019, with a dry autumn and heavy winter rain, he said.

Landowner Sallyanne Craig said the issue surrounding the release of water was far from resolved.

"There is only one long term solution and that is to recognise the need for an urgent upgrade to future proof that water infrastructure, by upgrading the plant to produce only a Grade B product," she said.

"There's a tremendous community swell of outrage and disbelief. There is tremendous and widespread and quickly spreading outrage and mobilisation of the community about this long-standing issue."

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Ms Craig said she believed Coliban Water was working on an outdated climate model, expecting the river to return to its original flows.

Less rainfall is expected during the cool season in the Loddon Mallee by 2070 as the world's climate changes, according to the Department of Environment Land Planning and Water.

The frequency and intensity of extreme rainfall events is also expected to rise, making flooding more likely.

Mr Pearce said Coliban Water was looking at long term plans for extreme conditions, dry or wet.

A large proportion of the Kyneton Water Treatment Plant's trade waste water comes from Hardwick's Meat.

Mr Pearce said Coliban Water was working with Hardwick's to create a long term solution for the use of the waste water it creates.

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