People were warned to avoid contact with water in the Campaspe River in June after Coliban began releasing treated industrial waste water, known as class c water.

The Environmental Protection Authority lifted the warning in July.

Coliban managing director Damian Wells said the latest warning was only a precaution.

"We're mindful that we have let the community down in terms of previous discharges," he said. "We really want to rebuild the trust with the Kyneton community and those downstream.

"This is precautionary advice. We think it's unlikely based on the current weather conditions, however we're not out of the woods yet."

Coliban Water has discharged water outside of the requirements of its licence at least nine times in the past 12 years, into both the Campaspe River and Snipes Creek.

Mr Wells said Coliban would be increasing the treatment capacity of its Kyneton Water Reclamation Plant by installing aerators into its lagoons.

The works are expected to be completed by March 2020.

Read more: Kyneton Water Reclamation Plant upgrade petition launched by residents after years of releases to Campaspe River

But Kyneton resident Sallyanne Craig said the changes were like "putting a band-aid on a broken leg".

"What we want is real action," she said. "What we want is a commitment to completely upgrade the plant. This is not the community being sad or outraged.

"We don't have the tolerance anymore for this flagrant disregard for the river and its communities."

Mrs Craig said the entire plant needed to be overhauled.

"We need a complete rethink of the model," she said. "The privatisation has resulted in chronic under-investment in infrastructure."

Mr Wells said Coliban Water would be assessing the best options going forward.

"Anything Coliban Water does is ultimately paid by our customers," he said. "We need to make sure we meet our service obligations, our environmental obligations and our community expectations.

'We need to make sure our investments are in the right areas."

Mrs Craig said the community would rally until concrete changes were made.

"Coliban is failing at its job and it's the river communities who are paying the cost," she said.

Have you signed up to the Bendigo Advertiser's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in central Victoria.