The water in most of the Cardrona River catchment appears to have been given a clean bill of health by the Otago Regional Council.
The main exception is the stretch of the river nearest to Wanaka, including the area where two dogs died over the summer after coming into contact with toxic algae.
A newly completed water quality study by the council's manager resource science Dean Olsen said testing for toxins in cyanobacterial material associated with the death of one of the dogs confirmed the presence of "high levels of the potent neurotoxins Anatoxin-a and homo-Anatoxin-a''.
Dr Olsen's report, presented to the council last month, compared water samples from this year with those from a study in 2004-05 and concluded water quality in the upper Cardrona River was "generally very good''.
In the lower catchment, below the State Highway 6 bridge, high concentrations of nitrogen were found, "likely to exceed'' the council's standards.
The deterioration in water quality coincided "with the location of nitrogen-enriched groundwater entering the river''.
Commenting on the report this week, council director policy planning and resource management Dr Gavin Palmer said the reason for the high nitrogen levels in the lower 3km of the river was groundwater from the Cardrona aquifer coming to the surface.
This was occurring in small volumes and had only a minor impact on the Clutha River.
He described the report generally as a "good-news story''.
Dr Olsen said in his report long-term monitoring under the "state of the environment'' programme had been done regularly at the Mt Barker, or The Larches, site since 1989.
Dr Olsen said "no trend'' was evident between 2000 and 2015 for most variables but the concentration of E. coli "declined significantly''.
"All samples collected from the Mount Barker site at flow less than median flow were well below the [council's] schedule 15 limit.
"Water of this quality reflects very low risk to recreational water users,'' Dr Olsen said.
"This change is encouraging and may reflect changing irrigation practices in the Cardrona catchment, with a shift from flood to spray irrigation.
"Conversion of flood or border-dyke irrigation to more efficient spray irrigation has the potential to improve surface water quality ... especially concentrations of suspended sediment, phosphorus and E. coli, [but] may result in higher nitrogen concentrations in groundwater.''
Sampling conducted during 2014-15 showed concentrations of E. coli to be very low at most sampling locations.
Dr Olsen said the survey found water quality in Boundary Creek and Branch Burn, which flow into the Cardrona, "was generally good''.
"However, elevated [nitrogen] concentrations and E. coli counts were observed in Spotts Creek and were particularly evident during periods of low flow.''
The E. coli levels reached red-alert levels on a number of occasions.
A second E. coli "hot spot'' was in the Cardrona River upstream of Boundary Creek, but it was still below alert levels and therefore posed "minor risk'' to recreational water users, Dr Olsen said.
More investigation was needed, he said, to determine the likely source of the bacterial contamination at the two sites.
Elsewhere in the Cardrona catchment, concentrations of E. coli were "very low''.
Six fish species - brown and rainbow trout, longfin eel, koaro, Clutha flathead galaxias and upland bully - have been collected from the Mount Barker monitoring site.
Dr Olsen said the results of the survey should be "interpreted with caution'' because they were from one year of data rather than from samples taken over five years.
