Waverley residents in South Taranaki are disgusted after a photo of a bath full of dark brown water - which they say came directly from their tap - was shared online by a local.
But the local council said the discolouration is caused by a chemical reaction with chlorine, and the water is actually safe to drink.
Other residents have also said they've had brown or murky water in the past few months, and an almost overwhelming smell of chlorine.
"You almost pass out having a shower," one woman told the Herald.
The photo of the dark brown bathwater was posted on the Waverley Notice Board on Facebook, with the resident saying they had run the cold tap for 60 minutes straight but it still would not run clear.
"Anyone else getting crap water like this," they asked.
Others commented that it was "disgusting", and some said they too had experienced water that colour coming out of their taps.
One woman, who only wanted to be referred to as Kylie, shared a photo of a bucket of water the same colour as instant coffee.
"[The] water smells terrible, you almost pass out having a shower, and all our brand-new tapware is stained after less than a year installed."
The water only came out that brown once in the past few months, but since then it has been "murky" and continues to smell strongly.
She stopped drinking the water "months ago" due to the smell.
Another local said she had also recently had water that looked like "a cup of weak tea", and is worried the chlorine will harm her child's health.
"The smell of strong chlorine was so bad my eyes were watering," Jane Crowther said.
She was worried her asthmatic child might have trouble breathing in the shower.
"It's not as brown as it was but the chlorine is at such strong levels it really concerns me what it's doing to our health."
Local ward councillor Brian Rook said he had visited several houses in Waverley and "enjoyed a glass of water to test it for myself".
He said the water he had was cloudy when first poured, but cleared after about 10 seconds.
"There was a very faint smell of chlorine but not unpleasant."
South Taranaki District Council communications manager Gerard Langford said late last year routine testing detected possible E. coli contamination in the water, so council built a new water treatment plant for the town, which was completed a few months ago.
"Following a Ministry of Health request that all public water supplies be permanently chlorinated, chlorination was part of the treatment process - to make sure that all bacteria are killed, and the water is safe."
The Government recommendation came out of the Havelock North Inquiry into an E. coli contamination and campylobacter outbreak which caused thousands of people to fall ill.
"Since the new water treatment plant was commissioned, chlorine appears to be reacting with material accumulated on the inside of some of the pipes, left from when the supply was untreated," Langford said.
"We have been working hard to fix this by implementing a town-wide flushing programme of the town's pipes and targeting problem areas by doing intensive pipe cleaning known as swabbing."
The procedure involves forcing a foam swab through the pipes to scour them clean. Water pressure propels the swab forward, and the pipe is then flushed clean and tested for healthiness.
"This flushing and swabbing work has and will result in some water discolouration.
"We have been asking residents to run their outside cold water tap for some time to clear their house plumbing of the discoloured water."
If the water has not cleared after 15 minutes, residents should call 0800 111 323, which is an all hours, toll-free number, and council will send someone to do localised flushing.
"We believe we are getting on top of the issue and the work that has been done to date has seen significant improvements in most areas of the town. Unfortunately there are still some problem areas which is where we are doing the more intensive swabbing programme.
"We understand peoples' frustrations, apologise for the inconvenience many residents have experienced and want to reassure them the water is safe to drink and that we are putting resources into fixing the problem areas as quickly as we can."
Council will also consider some sort of refund on water charges for customers on a metered supply who have to run their taps to clear the water.