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Whitianga could become the first place in New Zealand to directly recycle its wastewater for drinking.

Re-using treated water from the town's new $22.7 million wastewater treatment plant is an option being considered by a focus group trying to find the best way to dispose of water from the plant.

The facility, on the southwestern outskirts of the Coromandel Peninsula town, began full operations last month. It uses a resource consent inherited from the town's old wastewater pond system, disposing of treated water through spray irrigation and into a nearby stream.

That resource consent runs out in 2010 and options for the new consent application are being examined by a focus group made up of local government members and iwi and community group representatives.

The group has pared down a list of disposal options to a shortlist of four to take to a public meeting.

The options are to continue discharging into the stream with little or no change, discharge into the stream with extra treatment through denitrification beds to reduce plant growth, use full irrigation, or put the water into the Whangamaroro River upstream of the existing Whitianga water intake.

Recycling could be done as part of these options, either directly from the wastewater plant to the town's reservoir or through the river.

Cost estimates vary from $1 million to $2 million for the first option to up to $10 million for the third. Partial recycling would add another $4 million to $5 million.

Project engineer Gordon Reynolds said the group was leaning towards a lower cost option for the immediate future, with proviso for recycling in eight years when Whitianga would need more water.

The town was now drawing the full allowable capacity from the Whangamaroro River and there were no other economical river sources, he said.

"Water is a resource that needs to be managed. We should reuse it in whatever way is practical."

People had an emotional reaction to re-using wastewater because they knew what was in it, but most people had no idea what was in rivers.

"I want people to understand the quality of treated water from the plant is better than the water we use in most of the communities on the Coromandel Peninsula for drinking water.

"In Whangamata, there's not a single stream that's as clean as the water from the Pauanui or Whitianga plants."

Having spent so much money on treating water at the plant, he said, it would be a shame to waste it.