Criminal or civil charges are a possible outcome of a Government inquiry into the gastro outbreak in Havelock North, Prime Minister John Key says.

Cabinet will today sign off on the terms of reference on a Government-initiated independent inquiry into an outbreak of campylobacter bacteria in the town's water supply.

This morning Key said the inquiry would be in two parts and seek to understand what contaminated the water supply and how, whether the reaction of authorities was appropriate, and any lessons that can be learnt.

The Prime Minister said those who labelled such investigations as toothless were wrong.


"Certainly someone has died. Whether they have died as a result of campylobacter is a very, very different issue. But someone has died," Key told Radio New Zealand.

"So you cannot 100 per cent rule out civil or criminal charges. These things can be quite serious. I'm not saying it would do, or that is the cause. I'm just saying we have to look at everything."

Key said it was unlikely the Government would pay compensation to businesses affected by the outbreak.

Some scientists and the Green Party have called for the inquiry to examine the effect of farming on water quality, saying E. coli and campylobacter bacteria have been reported in other water supplies including Patea, Hanmer Springs and Christchurch.

Asked if that wider issue would be examined, Key said answering such questions was the purpose of an inquiry.

"Is it an issue ... that there is too much agriculture or too much intensification, or is it that intensification and increase is absolutely fine and something went terribly wrong here, and what that something is needs to be identified.

"There is a broader element to it - maybe not as broad as all of agriculture in New Zealand. But there are two parts to the inquiry."

The Ministry of Education says all Havelock North's schools and early childhood centres are expected to be back open today.

After the rolls are taken at Havelock North Intermediate this morning the students will be gathered for an assembly.

"We'll just talk through hygiene basically. Over the next little while we'll have the Red Cross in during the day at points. We'll be talking about using the hand sanitisers and washing hands properly when using the loo," said Principal Julia Beaumont.

At the weekend, the Hawke's Bay DHB said interim results from the Institute of Environmental Science and Research suggests contamination from cattle and other four-legged farm animals may have been in the water.

Medical authorities noted that there was a marked decrease in the number of patients presenting with gastro bug symptoms.

Test results from the Hastings water supply came back clear yesterday afternoon after earlier results showed an anomaly, put down to sampling irregularities.

The Council said today's results mean the Hastings supply, which also provides water to Flaxmere and Bridge Pa, can continue to be considered safe to drink, however it will continue to chlorinate the supply in the short term.

Dr Bridgette Sullivan-Taylor, an extreme event expert at Auckland University, criticised the official reaction to the outbreak, saying she was "staggered" at how quickly the disaster snowballed out of control.

"Better planning could have minimised unintended consequences and downstream effects that make the disaster worse. The fact that contaminated water was brought in to Havelock North in a tanker is staggering."

However, the district's Mayor Lawrence Yule maintained he didn't know how much quicker they could have acted.

"We're talking hours here, I'm not sure how much faster we could have gone. The critical thing is that we now know that people are likely to have been getting ill on Monday, yet we had a clear test on Tuesday," Yule said.

"Clearly if we had known something was happening on Tuesday with the water, we may have acted on Tuesday - but we had no indication anything was wrong."

Napier MP Stuart Nash said it's hard for locals to trust the water infrastructure again when it's still so unclear what went wrong.

"We're not looking for people to blame, there's no doubt about that, but it's hard to know what to do or where to look next."

- With Newstalk ZB