The future of Environment Canterbury (ECan) hangs in the balance as the Government considers axing the council and replacing it with a commission.

Local Government Minister Rodney Hide and Environment Minister Nick Smith will fly to Christchurch on Wednesday for a series of urgent meetings with local authorities and stakeholders over the fate of the embattled regional council, following a damning report on its performance.

The Government is considering taking the unprecedented step of dismissing ECan and replacing it with a commission until governance and management issues around the allocation of water rights in Canterbury are sorted out.

But Labour and the Greens are already gearing up to fight the move. They have accused the Government of deliberately undermining ECan in a bid to speed up water-hungry projects in Canterbury. The Greens are also questioning the impartiality of the chairman of the Government-ordered review of the council's performance, former National deputy prime minister Wyatt Creech.

The Creech Report, released yesterday, found ECan had botched the management of freshwater in Canterbury, impacting not only on the region but the national economy. It has recommended all water management be taken off the council permanently, and a Canterbury Regional Water Authority be established, governed by a board made up of government appointees. It would create and implement a new water plan for the region.

ECan should be disbanded and the council run by a commission for three years, until fresh elections in 2013.

That would mean Cantabrians would be denied a vote for their regional councillors in this year's local body elections.

The Creech Report says it would be too difficult for the council itself to manage the transition to a separate water authority without creating problems of governance and accountability.

"Given the large gap between the region's needs and ECan's performance and capability, we think our recommendations are the only prudent course of action the Government can take," the authors say.

However, the Government is wavering over such a drastic step as removing the council. It would require a special act of Parliament, since neither Hide nor Smith have the legal power to do so.

It has established a high-powered Cabinet committee to consider the issue, comprising Smith, Hide, and Christchurch-based ministers Gerry Brownlee (economic development), David Carter (agriculture) and Kate Wilkinson (conservation).

Smith said no decisions had been made on whether to accept the report's recommendations, but managing Canterbury's water was a huge strategic issue for the Government.

"A tinker isn't going to get on top of the problem. Substantive change is required. It's not a matter of who might be the council or the chief executive or the other staff. There is a fundamental structural problem here that the Government has to get on top of and fix."

But Green Party co-leader Russel Norman said ECan was paying the price for standing up to the dairy industry and refusing water consents.

"Everyone now has a clear message. If you stand up to protect water, you're going to be taken out."

Norman questioned Creech's suitability to chair the report into ECan. "Wyatt Creech is a director of Open Country Cheese, which has convictions for dirty dairying. So why put him in charge of a review of the regulator of the dairy industry?"

Creech's firm has been twice prosecuted for contaminating Waikato farmland and rivers.



Another of the report's authors, Morrison Low, was employed by local authorities in South Canterbury to investigate the feasibility of breaking up ECan and forming a South Canterbury regional council.



Creech said his review group was "very conscious" of the implications of removing an elected body.



"These issues in Canterbury are much more serious than the public realises and the country is paying the price," he said.



Canterbury holds 70 per cent of fresh water in New Zealand, and 50 per cent of hydro water.



The Creech Report found that an absence of planning and policy framework had led to a "piecemeal" approach to the management of fresh water.



It found there was a "science-led" rather than "science-informed" approach. ECan put too much emphasis on the environment and its consenting processes suffered from inadequate staffing, lack of skills, leadership and RMA planning.



But the report found the public perception of ECan as "dysfunctional" and litigious was unwarranted.