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The council yesterday released a statement saying a sample it took from the water body at Ocean Grove tested positive for cyanobacteria, after it was informed of the bloom by a citizen scientist.
Signs were erected at the lagoon yesterday near the beach access to warn the public of the risks associated with the bloom, which is mostly at the bottom lagoon and has high levels of cyanobacteria.
The lagoon discharged into the stream running on to the beach, so beachgoers should take care in that area, the statement said.
Cyanobacteria can produce toxins harmful to humans and animals if they are swallowed or come into contact with skin.
Exposure to cyanobacteria may cause symptoms such as skin rashes, nausea, stomach upset, and tingling and numbness around the mouth or tips of fingers. Cyanobacteria occur naturally, but can increase rapidly during summer months.
The council warned all contact should be avoided if water was green or had floating bright green or blue scum. Not all cyanobacterial blooms were visible to the naked eye and toxins could persist after the bloom disappeared.
The council will continue to monitor and update the public as the bloom changes.
Anyone experiencing health problems after contact with contaminated water should visit their doctor, the council said.
The announcement is not unusual for the lagoon, which also had a cyanobacteria outbreak last summer.
Lake Waihola and Falls Dam in Central Otago are also regularly monitored for the algae.
Anyone with symptoms wanting information from health professionals can call Public Health South on (03) 476-9800.