The Ashburton District Council has reneged on its deal to sell commercial land to a Chinese-controlled company that planned to bottle South Island water for export in an initiative that excited strong local opposition.

South Island news media and the Green Party are reporting the council pulled out of the controversial deal at a meeting last week that was closed to the public, citing as a reason for withdrawal a concern that the company could not assure it that the exported water would leave the country in bottles rather than plastic bladders.

NZ Pure Blue, the company behind the plan, had expected the plant to create around 100 jobs in the South Canterbury town.

Opposition to the deal focused on the fact it planned to extract some 1.4 billion litres of artesian bore water annually under a 30-year resource consent granted without public notification, despite this being a tiny fraction of the 10 trillion litres of water extracted annually in New Zealand for irrigation, town drinking water and industrial use.


The initiative was attacked as inappropriate for an area prone to drought and because there is no royalty on water extracted for export and was opposed in a petition signed by more than 40,000 people.

Prime Minister John Key ruled out imposing a royalty on drinking water extraction, saying the jobs and taxes the plant would create were sufficient pay-off for allowing it to go ahead.

BusinessDesk was not immediately able to contact NZ Pure Blue's two New Zealand directors, John Paynter and Roydon Hartnett, for comment.

Green Party water spokeswoman Catherine Delahunty welcomed the decision, saying it "beggars belief that the council would even consider selling a plot of land with resource consent to bottle pristine artesian water that should belong to the community", especially given the pollution of Canterbury freshwater resources by dairy industry rapid expansion.

Those who profit from the use of water, like those who bottle and sell it as a premium product, should pay for the privilege.

"Those who profit from the use of water, like those who bottle and sell it as a premium product, should pay for the privilege," said Delahunty. "Flogging it off to the highest bidder is not a sustainable or even sensible attitude to take towards our water."

The Stuff website quoted Ashburton mayor Angus McKay as saying the potential purchaser failed to tell the council "how they intended to run a water bottling plant from the site".

"In particular, we wanted confirmation that the plant would be using bottles not water bladders ... [this] has given us enough cause for concern to cancel the Sale and Purchase Agreement," he said.