A Melbourne environment group is calling on Victoria's Environment Protection Agency (EPA) to prosecute companies that regularly dump toxins into a creek in the city's east, after the watercourse was left covered in a white foam.

Charlie Miller, of the First Friends of Dandenong Creek group, said there was a spill of some sort in the creek on Saturday.

"There are great balls of foam floating along the creek and on the grass beside the creek," he said.

"The wind has dissipated it but there is still lots of foam on top of the water and on the side.

"Sometimes it can smell like laundry water and that's what it looks like. I'm sure it is reasonably toxic."

The EPA has called it a "significant pollution event" involving some kind of detergent and is investigating.

The EPA says people and animals should stay away from the water for the time being. ( ABC News: James Oaten )

Spokesman Damian Wells called on anyone with information to contact them.

"The Dandenong catchment has a very complex drainage network," he said.

"There are several significant industrial zones in that area.

"What we're looking to do, as best as possible, is to isolate the source of that pollution so we can hold the offenders to account."

It is not the first time a pollution event like this has happened.

Mr Miller said there had been "fairly regular" spills which always happen on weekends or public holidays when the Environment Protection Authority has limited staff.

Mr Miller said the creek was covered in foam after some kind of pollutant was dumped into it. ( ABC News: James Oaten )

It also happened on Melbourne Cup day last year and carp and eels in the creek were found dead about five kilometres downstream.

"We report them on the weekend and the EPA does come out and does an inspection and sometimes takes some samples," Mr Miller said.

"But 99 per cent of the time the conclusion is source unknown."

The EPA is investigating what it called a "significant pollution event". ( ABC News: James Oaten )

He suspects the chemicals are being dumped upstream at an industrial area near Bayswater, at Joes Creek, which empties into the Dandenong Creek.

Mr Miller said the local councils have been running an education campaign to explain the impacts on the environment but it is not enough.

"They've probably been doing it for 10, 15 years … and getting away with it," he said.

"It comes down to the political will to go hard after them to actually prosecute them and fine them heavily.

"That would send a strong message to the rest of them doing the wrong thing."

Mr Wells said people need to be aware that they must manage their businesses properly.

"This is completely unacceptable and for all the good businesses in the Dandenong catchment this casts aspersions on others.

"It's just not fair when there are just a few businesses behaving poorly that make it difficult for others," he said.