Laying charges over the Havelock North gastro outbreak will be a call for organisations like the council or police, Prime Minister John Key says.
Attorney General Christopher Finlayson has released the draft terms of reference for the inquiry into an outbreak of campylobacter bacteria in Havelock North's water supply.
It will look at how the water supply was contaminated, whether the response was appropriate, and any wider lessons for New Zealand's water supply network.
The inquiry won't consider questions of civil, criminal or disciplinary liability.
The outbreak has caused about 4500 people to get sick, with 355 suspected campylobacter cases.
Those include pensioner Jean Sparksman who died on August 13. A post-mortem examination revealed she also had other underlying health issues.
"We don't know the cause of contamination so we don't know if any civil or criminal charges could follow. But by definition they don't happen from an inquiry per se, they happen because agencies decide that there should be action taken," Key said.
"You saw that with the Royal Commission of Inquiry for instance in Christchurch. In the end the sort of bodies that could take a prosecution...are potentially the council or police."
Who will lead the inquiry will be decided by Cabinet in the coming weeks. They will report to Finlayson in his role as Attorney General.
The Green Party has called for the inquiry to examine the effect of farming on water quality, saying E. coli and campylobacter bacteria have been reported in other water supplies including Patea, Hanmer Springs and Christchurch.
Key said his understanding was there was not much dairying intensification around the water bores in Havelock North.
However, if the contamination was related to farming intensification the inquiry could make recommendations addressing that.
"If it makes some recommendations to the government about changes that are required then the government will obviously listen to that."
While the outbreak was significant he did not think it had done any long-term damage to New Zealand's "100 per cent pure" marketing image.
The Prime Minister said he was happy with the government's response to the outbreak. There were no plans to give compensation to affected businesses, but the IRD would waive interest on late tax payments.
He did not think him visiting the area was necessary: "me wandering around probably of itself isn't going to do much".
The Hawke's Bay DHB over the weekend said interim results from the Institute of Environmental Science and Research suggests contamination from cattle and other four-legged farm animals may have been in the water.
Medical authorities noted that there was a marked decrease in the number of patients presenting with gastro bug symptoms.
• More than 4100 people affected.
• Investigation will look at broad improvements to water supply.