A diesel spill of more than 1500 litres has left Raetihi without its town water supply - and no one can say when the taps will be back on.

As the locals struggled to deal with a second day of relying on a tanker parked at the Seddon St Four Square, it was revealed that the contamination had come from the skifield on Mt Ruapehu.

Dave Mazey from Ruapehu Alpine Lifts (RAL), which operates the Turoa skifield, said the spill came from a diesel tank, which stores fuel for the skifield's equipment. "A pipe attached to the tank became disconnected. We don't know how or where or when."

Mr Mazey said he was "dismayed" by the contamination.

"We take very seriously the fact that we operate within a pristine environment. We thought we had good equipment and good processes in place to deal with this type of situation, but, obviously, we don't always get it right," he said.

"We realise this situation is even more dismaying for the residents of Raetihi."

The situation had been compounded by heavy rainfall in the area, which had masked the full extent of the spill.

More than 1500 litres of diesel has leached into the Makotuku Stream, the primary tributary to the Raetihi town water supply.

"We first saw it on Tuesday, but it seemed very small," Mr Mazey said. "It wasn't until the ground dried that we realised what we were dealing with."

RAL had notified the authorities as quickly as possible, and a full investigation into the spill would be carried out.

Ruapehu District Council is also investigating, having an expert from its water contractor, Veolia Water, flown into the area yesterday.

Council Communications manager Paul Wheatcroft said it was too soon to say how long the small town would need to be without water and a tanker would continue trucking water in daily and parking outside the Four Square.

"It's a big spill. We don't know how long it will take to decontaminate the water supply yet."

The reservoir in Raetihi was covered with an oil slick, he said.

Horizons Regional Council, the Department of Conservation were working together with the RDC on the diesel spill. At this stage, DoC was also working closely with iwi groups who have an affiliation with southern Ruapehu.

People are advised to visit the Ruapehu District Council website www.ruapehudc.govt.nz for further information on water supply and ablutions.

All consent holders who take water from the Makotuku Stream have been notified by Horizons Regional Council.

A response team has also been mobilised by Horizons, and will manage the immediate mitigation and clean-up.

Any effect on native flora and fauna is unknown at this point, and DoC has teams on the ground surveying for any effects on whio (blue duck) and other wildlife.

Potential effects are unlikely to be known for several days when more information about the scale of the spill is available.

Updates will be provided as these become available.

An urgent meeting of the Waimarino/Waiouru Community board was called last night by chairman John Compton, who said yesterday he needed some answers from council. "This was reported on Monday and we need to know why it has taken this long to do something." Raetihi resident John Chapman who reported a strong "petrol/chemical smell" coming from the taps on Monday said he knew the water was contaminated.

"But I can't believe the council and Veolia Water just fobbed me off as if I didn't know anything."

Mr Chapman said he wants to know how often the town water is checked. "It should be checked daily but I'll bet it isn't ."

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