The Government is planning to make it easier for private companies to take over water and wastewater services from councils.

Local Government Minister and Act leader Rodney Hide yesterday said "flexibility in delivery of water services" was part of changes to the Local Government Act 2002.

The Government wants to extend the 15-year limit on water-service contracts to 35 years and allow companies to build, own and operate new water and wastewater treatment plants during the contract period.

The law will also be changed to stop councils controlling the management of privately run water services, although they will retain final say on pricing and policy.

Under the act, councils can contract "any aspect of the operation of all or part of a water service".

Mr Hide said the changes were aimed at small councils that needed to invest in water and wastewater plants and were interested in a public-private partnership.

"We have said, 'Let's be realistic about this and have it reflect the period of time of the asset', so we have taken it out to 35 years," he said.

Green Party local government spokeswoman Sue Kedgley said the changes would effectively privatise all aspects of water supply services.

"This has the potential to be hugely harmful to the public," she said.

"This theft of the public's assets is alarming and dangerous."

Auckland water campaigner Penny Bright was totally opposed to the plan.

"In no way is the commercialisation or privatisation of water services to be supported."

She said water services should never be run to make a profit. Affordable water was a basic human right.

Most New Zealanders pay for their water services through rates or charges set by their local council.

One exception is Papakura, where United Water has provided water and wastewater services to about 15,000 customers since 1997 under a 30-year agreement.

United Water is an Australian company, and is being sued by the South Australian Government for allegedly charging its overhead costs in Papakura and elsewhere to South Australian water users.

In other changes announced yesterday, Mr Hide gave councils a gentle reminder - rather than the big stick he envisaged - to focus on core services.

He backed off limiting council spending to core services and holding referendums on expensive projects to curb big rates rises.

Instead, the Local Government Act will be amended to require councils to have "particular regard" to core services.

These will be defined as infrastructure, rubbish, libraries, recreation, culture and heritage services, hazard and disaster management, and regulatory and statutory responsibilities.

Mr Hide said he would have liked to have gone further, but he was working with a centrist, pragmatic National Party.

Councils will be required to "open the books" before elections in the same way as the Government does, and provide "plain-English" financial reporting.