The Tamborine Mountain state school has run out of water, even as water miners in the Gold Coast hinterland are sending millions of litres to commercial bottling operations.

Trucks sent by the Queensland government carrying emergency supplies to the school, including Mount Tamborine bottled water, have been passing trucks heading in the opposite direction taking local water to bottling plants for beverage giants such as Coca-Cola.

The school remains open but parents have been advised by teachers to consider keeping their children at home.

Water miners in the Mount Tamborine area supply roughly 130m litres of water each year to commercial bottling operations. Now the local bores are running dry.

“I was staggered,” one local resident, Craig Peters, told Guardian Australia. “It was more or less the final straw for me. The school’s bore is 50 metres deep and has never ever had these issues before.”

“We had an award ceremony at the school yesterday and earlier in the day [the school] sent out an SMS about the water situation.

“At the conclusion of that ceremony they said give serious consideration to not sending kids to school for the rest of the week because of the lack of water.

“The school bore has been operating since the school was there. There’s many other bores that have run dry. We are the largest community in Australia that doesn’t have reticulated water. If it doesn’t rain, people get water trucked in to fill their tanks.

“Now the government is buying water back from Coca-Cola to bring here, which is where it came from in the first place.”

The education department said it would continue to deliver water to the school until the end of the school holidays.

Residents said the situation was a tipping point and would concentrate longstanding concern that the local water supply should be prioritised above the three commercial operations, which between them have approvals to send roughly 2.5m litres a week down the mountain.

The situation seems to fall into a regulatory void, with no mechanism to halt commercial operations in times of severe drought or ensure that local water is allocated to locals.

Peters said the community wanted the state’s natural resources minister, Anthony Lynham, to use emergency powers to prioritise local supply.

Lynham said in a statement he understood the concerns of residents and the impact of the drought on their water supply.

“As I have previously said, groundwater is not regulated on Mount Tamborine and so my department does not have the power to limit take.

“I do have the power to limit take in a declared water shortage – but that is everyone’s take, including local farmers, households, and businesses.”

“QUT research says levels of groundwater extraction are equivalent to less than five per cent of average annual groundwater recharge.

“Of that five per cent, farmers use almost 84 per cent of the extracted groundwater for horticulture, households almost 11 per cent, and bottled water operations, about five per cent.”

The Scenic Rim council has responsibility for monitoring the commercial water miners and ensuring they comply with their development conditions.

In September the Scenic Rim mayor, Greg Christensen, tabled a mayoral minute that raised concern about the situation. It said authorities had no legal recourse to prioritise local supply in times of drought.

“Council is aware that local water carriers are expressing concerns that the supply of water for household delivery on Tamborine Mountain is reduced, and with no rain predicted soon, may become critical,” Christensen said.

“Additional water supplies (bores) are being sought to supplement existing supplies to cope with increased demand. Any commercial water extractor on the mountain is doing so in the context of relevant approvals and therefore a legitimate use.

“There is no legal recourse for council to require water suppliers to provide additional water for local use. Once a development has been approved, it may continue to conduct the use indefinitely as approved.”

Past studies have pointed to negligible impacts from groundwater extraction operations, and that the water table can replenish itself through rainfall.

But Peters – who supplies water from his property for local consumption – said the situation had changed. The drought, which dried out nearby Gondwana rainforest that burned in spring bushfires, has bitten hard.

“The water patterns have changed,” Peters said. “What might have potentially been a sustainable business at one point in time, that’s no longer sustainable.”