The Central Hawke's Bay District Council is eyeing a proposal for a new dam on the same river farmers tried to build the now-doomed Ruataniwha dam.

A proposal being put to council as part of their draft annual plan on Thursday is to give $250,000 of ratepayer money to Water Holdings CHB Limited, to start feasibility work into a new dam to store water in the Makaroro River.

Water Holdings CHB owns the intellectual property associated with the Ruataniwha scheme, along with the consents to build the dam.

Water Holdings CHB shareholder and former CHB Mayor Tim Gilbertson said it was still early days.

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He said he felt the community had evolved since the discussions around the Ruataniwha dam.

Two or three years ago people seemed to think everything was "tickety boo" but there had now been a fundamental change in people's attitude towards water storage, Gilbertson said.

He said he anticipated there would be some "politically-motivated" opposition.

CHBDC chief executive Monique Davidson said council was considering the adoption of the draft annual plan, which would then go out for community consultation.

"That's a really critical step - that council has said we recognise that water security is a massive challenge for this community, but we want to have a community conversation, and we want to hear back from the community before we make a decision."

She said while there was a significant history in regards to the Ruataniwha water storage scheme, this was not the same scheme.

"This is about putting our energy and resources ... into considering other options."

She said as well as looking at water security for the community, the council had to look at what was best for the river.

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"Council in its genuine desire to hear from the community, we want to make sure the environmental component is really critical.

"Right now we are simply asking the community as to whether council should be providing financial support to Water Holdings CHB so that they can explore those options."

Mayor Alex Walker said the proposal they were voting on was whether or not to ask the CHB community if it wanted council to help fund Water Holdings CHB to explore the intellectual property that already exists.

"What that infrastructure looks like we don't know, we are open minded."

Member of Ngati Marau hapu Johnny Nepe Apatu said water quality needed to be considered first.

"I am definitely against anything happening that's going to interfere with the life force in the water.

"It's the state of the water."

Nepe Apatu, who is a member of both Rakautatahi Marae and Waipukurau Marae, has taken a claim to the Waitangi Tribunal in regards to the river.

He said council was aware of the water quality situation, but had done nothing to alter it.

"They've just increased the taking of the volumes."

He said CHB needed to diversify its economy, for example through growing hemp, which required less water.

Forest and Bird regional manager Tom Kay said the organisation was concerned about the proposal.

"The money would be handed over as a suspensory loan, which does not have to be repaid.

"This is a council handout to a project that has already cost Hawke's Bay Regional Council around $20 million."

The discussion at CHBDC is happening as Regional Council discusses whether to push back the implementation of new environmental standards which would increase minimum flows in the Tukituki River.

The decision was meant to be made at a meeting last week, but was pushed back after a walk out prevented council from voting.

The decision has been pushed back until April.