People in the Far North are being told to reduce water consumption immediately because of unprecedented demand.
The district council says a water treatment plant in Paihia is now running 24 hours a day and storage reservoirs are not refilling to capacity.
Even so, storage reservoirs that normally refill overnight are now failing to reach capacity, with one reservoir reaching just 62 per cent full last night.
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Mayor John Carter said demand for water at holiday hotspots in the Bay of Islands had broken records as there has been a huge influx of visitors to the area.
"The council wants to do all it can to support our tourism industry. However, we simply cannot produce enough water to meet current demand, so I am pleading with everyone to immediately reduce water consumption over the holiday period so we can avoid the need for water restrictions," Carter said.
He is urging locals and holidaymakers to flush toilets less and have shorter showers.
Residents and visitors to the area are being asked to immediately report any water leaks by calling the council on 0800 920 029.
"Water pipes break more frequently when we have very dry ground conditions as we do now. Contractors have already repaired two significant water leaks in the Waitangi area, but we need your help to identify leaks quickly so we can prevent further water loses," Carter said.