Ohakune residents will have to boil their tap water when it returns.

The central North Island town has been without water since Sunday due to damage to the pipeline caused by an earthquake on July 25 this year. 

It was originally expected the water network would return to normal on Monday evening, but that was pushed out by 24 hours.

The outage has caused schools and eateries to close, and the Ruapehu District Council has provided a water tank, containers of water and portaloos for the town's 1400 residents.

An update released by the Ruapehu District Council just before 12pm on Tuesday said "good progress is being made on recharging the Ohakune water network".

It also said a precautionary boil water notice would be in place when water returned until testing confirmed the water was safe to drink.

Residents were advised to boil water for two minutes and then allow it to cool before drinking or using for food preparation.

Ruapehu Civil Defence controller Vini Dutra thanked Ohakune residents for their patience during the outage.

"Please continue to use water sparingly over the coming days so the reservoir can fully recover and pressure can be restored to normal levels," he said.

The council has asked residents to turn on outside taps and let them flow to help clear air from the pipes, while their inside ones were kept off.

"Taps may splutter when first turned on. This is just trapped air being released and is nothing to worry about," the council said.

"Water may also look milky. This is caused by air bubbles and is not a health concern. Low pressure may continue to be noticed until the reservoir has refilled several times."

The council's water services are contracted to Veolia, which RNZ has approached for comment.

On Tuesday, the council said it was too soon to answer questions about whether it could seek to fine or take other action against Veolia because of the outage, or whether closed businesses could get financial assistance.

"Far too early to answer that - we are still in response mode," a spokesman said.

"When the water is safely back on there will be a review of what happened ... and those issues will be looked at then."

School stays shut, businesses scramble

Ruapehu College remained closed on Tuesday. Principal Kris Vine said staff were staying in touch with the school's 250 students.

He was waiting on more information so he could plan the school's reopening, and communicate information to students' families.

"Most students are probably not too disappointed with not coming to school, to a certain extent, but I know that they'll be missing their mates and, obviously, there's the realisation of what water means to a community," he said.

"It's probably a nice little learning curve and a timely reminder about emergency planning and that kind of stuff for whānau that are dealing with it."

Students from Waimarino and Raetihi were not affected by the outage.

"I'm just here waiting for phone calls and checking in on any updates and things," Vine said.

"It's a nice little admin day, so to speak, but also a bit of a sit-and-wait kind of day, which is long."

At The Peaks Motor Inn, manager Remi Butler previously told RNZ the motel had taken a financial hit when a large group booking cancelled.

After the council confirmed the water would be out until Tuesday evening, she said she was disappointed and stressed by the news.

She said she and her husband were even contemplating buying a pump to get river water to flush toilets at the motel.

The motel did, however, have plenty of bottled water.