Health authorities are warning people to avoid areas of algae and to exercise caution when fishing or boating.
Otago Regional Council director of environmental information and science John Threlfall said a sample taken from the lake had confirmed the toxic blue-green algae, which occurs naturally in a variety of water quality conditions, was present there.
''At the moment, the water in Lake Waihola looks very green. This is due to this algae species which belongs to the `cyanobacteria' group of algae.''
This group of algae had the potential to produce a series of toxins which were then passed to the water and could cause illness in people and animals.
Until the algal samples were tested for toxicity early next week, it was impossible to predict the toxicity of the algae. The council was following Ministry for the Environment guidelines which directed a warning be issued when tests showed the presence of algae at a certain level.
''We're not saying don't fish or go near the water; just if there is a lot of green algae, do not get it on you.''
It was not known what triggered the algae, although one theory was the mild winter had not killed it off.
The council had met members of the Waihola community who were upset at how last year's algae outbreak had been handled and its impact on the business community.
Lake Waihola Cafe and Bar owner Kevin Reid said the council's response was ''200% better'' than last year's when the council essentially ''put up signs and went on holiday''.
It was disappointing the algae had come back right on a holiday weekend, he said.
''We've got our fingers crossed it [the test] comes back negative. It's very frustrating.''
Dr Threlfall said levels of the algae in the lagoon were not as great as at Waihola but had the potential to deteriorate.
Southern District Health Board medical officer of health Marion Poore said people swimming in water with increased levels of algal bloom had been known to develop allergic reactions such as asthma, eye irritations, rashes, blistering around the mouth and nose, and gastrointestinal disorders, including abdominal pain, cramps and diarrhoea.
''Any reaction depends on the type of toxins present, and the concentration of the toxin in the water. The higher the concentration of toxins and the longer the contact with the water, the more severe the symptoms are likely to be.''
People should not swim in areas affected by the algae, and other water users, including fishermen and boat users, should exercise caution, Dr Poore said.
Pet owners could safely walk their dogs on the lakefront, provided they kept them well away from the water.
''In the case of illness or suspected illness after swallowing water containing algal bloom, seek advice from your doctor. If your animals become sick, contact your veterinarian immediately,'' Dr Poore said.
The council had put up warning signs where the algae had been found, and would continue to monitor the situation, along with Public Health South.
Toxic algae
• Can give waterway a vivid green colour like pea soup.
• Can be toxic to humans and dogs.
• Do not allow dogs near water with blue-green algae.
• Fishing and sailing should be safe.
• To be on safe side, avoid swimming in it.
• Can eat fish in moderation from those waterbodies.
• Avoid eating the fish's liver.
• Seek medical advice if you become ill after swallowing water
Source: Otago Regional Council
