There is a complete ban on hoses, sprinklers and garden irrigation systems in Kaitaia.
The Far North District Council says its top priority is to make sure there is sufficient water reaching households, as a public health measure.
Spokesman David Penny says they have held off the restrictions for as long as possible.
He says unless the council reduces demand on the water supply immediately, they could be facing tougher restrictions including stopping or restricting supplies.
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While the situation has become critical in Kaitaia, Penny says similar scenarios are playing out across the Far North, and restrictions in other places are possible over the next few weeks.
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