Deputy Prime Minister Winston Peters says the controversial Waimea Dam project rejected by Tasman district councillors would have been of benefit to the region.
Peters told The Country's Jamie Mackay today he was disappointed with the decision.
"It's about small towns around New Zealand - it's all critical to their infrastructure and their long term viability and in fact, their growth."
Peters said the coalition agreement "made it very clear that we wanted to see certain operations like that proceed," and that there were talks with the mayor of Tasman for the Provincial Growth fund to be involved, "and yet it got voted down".
"We can't ... stack something up and the local people, in terms of their local government, say no ... you can't take a horse to water and make it drink."
Another contentious issue is whether the Government should fund the All Blacks in an attempt to retain talented players.
"The provinces are thriving with rugby players and All Blacks," said Peters, who told Mackay he was not prepared to discuss the matter further until he had all the "fundamental facts".
Also in today's interview: Winston Peters addresses the Government's reported 152 working groups, rumours about who the National Party leaker is and Australia's Prime Ministerial shambles.