Local MPs are outraged by the "complete lack of transparency" they say the regional council showed, committing ratepayers to a $35 million buy into the Ruataniwha Dam with no public consultation.
At this week's general meeting, council approved a "provisional decision" on entering the region into a 35-year water user agreement, subject to the scheme proceeding.
The proposal was put forward for the benefits it might yield in regards to the augmentation of environmental flows, such as increased flushing flows for the mainstream rivers.
This decision has sparked outcry from Labour MPs Stuart Nash and Meka Whaitiri, the latter saying: "It's time to accept that Ruataniwha is more sham than dam."
Mr Nash said if the regional council was transparent and went out to the community for feedback he believed they would get the buy-in of the people who had actually elected them in.
"This complete lack of transparency is a real concern to me," he said.
"And the reason I say that is because this is the sort of behaviour of an organisation that has something to hide."
He said it was this sort of behaviour that made people suspicious of council's motives.
"The secrecy ... it's not democratic and it's not the way New Zealanders do business, and it's not the way New Zealanders expect their elected officials to do business," he said.
Ms Whaitiri said HBRIC (the investment arm of council) was now effectively asking council and ratepayers to sell water to themselves.
"It's hard to escape the conclusion that HBRIC's water user agreement offer to council is a desperate measure for the investment company to meet its water sign-up targets," she said.
"I'm calling on HBRIC and the regional council to provide concrete assurances to Hawke's Bay ratepayers now or get out of this deal."
Council's chief executive Liz Lambert responded, saying some of the political statements made contained factual inaccuracies based on incorrect assumptions.
"For example, the purchase of any water by [the council] does not count toward the water uptake total needed to meet the minimum sign-up target," she said.
Ms Lambert said from the early stages of planning the council had an option on the table to take water for environmental improvements.
"But there is a cost associated with that," she said.
"Instead of being 'pay as you go' for water in the first 10 years, the first six years of the dam operating [the council] would receive the water for free.
"This water may be used by [the council]l without restriction. After the tenth year, [the council] would pay for the water under the same terms as any foundation water user."
Part of council's dividend from its $80 million investment would be financial, and part would be "environmental" in the form of additional water for the Tukituki catchment. President of Local Government New Zealand Lawrence Yule also raised ire with the decision.
"If the expenditure is characterised at the level that I am being advised, which is $35million, then I would have thought that there was a clear requirement to consult with the public in some way," Mr Yule said.
Tukituki MP Craig Foss said the provisional commitment of funds to the Ruataniwha dam was a matter for the regional council and he continued in his support of the scheme.
"The commitment of funds is a positive step forward and will give ratepayers, including farmers, growers and families, confidence in the scheme and the huge opportunities it presents for our region," he said.