The level of mercury poisoning around an old mine at Puhipuhi could see the Northland Regional Council ask for government funds to clean up the site.
Monitoring manager Colin Dall said the council's environmental management committee was awaiting results from a University of Canterbury study of the site and residual toxicity in nearby waterways and ground.
The committee will then decide whether to apply to the Ministry for the Environment's fund which provides $2.63 million a year to regional councils to deal with contaminated sites that pose a risk to health and the environment.
The Puhipuhi Mining Action Group and the Ngati Hau Trust asked the council a month ago to apply to the fund.
The two groups are concerned that leakage from the old mine might be seeping into downstream waterways which are used for domestic and farming use.
Mr Dall confirmed that water testing showed high levels of mercury in the catchment. He said the university study might help determine how much was naturally occurring or could be attributed to leaching from the old Puhipuhi Mercury Mine and other quarrying sites.
The area also has defunct gold and silver mines and a discarded road-metal quarry. The metal contained mercury which poisoned waterways, verges and pasture beside the roads where it was used.
"These mining remnants have never been properly assessed for dangerous after-effects nor, to our knowledge, have the tailings dams resulting from mining been monitored for leakage, stability, contamination or potential future collapse," Mining Action Group spokeswoman Jenny Kirk said.
The results at seven out of 16 sites recently tested by the regional council and Ngati Hau Trust ranged from two to 28 times above the trigger limits for mercury in sediments, the mine dam outlet being 500 times greater than the trigger limit, the group said.
Mr Dall said that should the regional council apply for ministry funding it would have to put up a strong case as there would be many competing projects throughout New Zealand.