Lake Okareka is the first of the Rotorua lakes to have a formal action plan drawn up to improve its water quality.
Recommended measures include a fully reticulated sewage scheme, changes in land use, three new wetlands and trialling an engineering system to collect and treat water fromthe bottom of the lake.
A working party set up early this year because Lake Okareka was showing warning signs of deterioration has endorsed the moves to reduce nitrogen load by a target of 2.3 tonnes and phosphorus by 0.07 tonnes.
The recommendations will now go out to the community for comment before final decisions are made.
A popular recreational lake, Okareka is 11km from Rotorua.
There is a small lakeside village and the 1600ha catchment is 51 per cent pasture and about 30 per cent native bush.
Working party co-chairman Neil Oppatt, a Rotorua district councillor, said an economic report showed farmers could be "strongly financially advantaged" if they turned parts of their properties into lifestyle blocks.
One of the options Environment Bay of Plenty and the Rotorua District Council will discuss with rural landowners is converting 200ha of pasture to forest or 100ha to lifestyle blocks. Both land uses produce fewer nutrients than farming.
The regional council may also assess farms to make sure farming practices minimise nutrient loss.
The action plan group involves district and regional councils, the Department of Conservation, Fish and Game New Zealand, iwi, landowners and the local community.
