The site of a water bottling plant in Christchurch, which used to be the Kaputone Wool Scour.

A controversial water bottling operation in Christchurch has been ordered to stop its activities after being caught illegally taking water from beneath the city.

Cloud Ocean Water Ltd was granted consent in December to extract around 1.5 billion litres a year at a plant in Belfast, which it intends to sell abroad.

The China-based firm only had to pay $2277 for the resource consent application and a few hundred dollars annually for monitoring costs, triggering widespread outrage at New Zealand's water being sold off.

The consent required Cloud Ocean Water to inform Environment Canterbury (ECan), which granted the permission, of when it intended to actually begin taking water to activate the consent.

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This has yet to happen, but it has emerged the company has already begun pumping water through its 33m bore on its site at the old Kaputone Wool Scour.

It is not clear when Cloud Ocean Water began illegally taking water but it could amount to millions of litres.

ECan became aware of the issue last week and on Friday issued the firm with an abatement notice ordering it to immediately stop taking water from its well.

DAVID WALKER/STUFF Peter Richardson speaks outside a 'Save Our Water' rally at the Environment Canterbury offices in March. He is now spearheading a legal challenge against the regional council and two water bottling companies that have been granted consents.

The company has also failed to provide ECan with water meter data to show how much water it has taken - another breach of its conditions.

ECan senior operations manager Nick Daniels said: "We learned late last week that Cloud Ocean Water had breached both these conditions, which is unacceptable."

The abatement notice means Cloud Ocean Water must now stop taking groundwater until it meets all consent conditions.

Permission has been granted to extract billions of litres of water from deep aquifers beneath Canterbury every year and sold abroad, for the potential benefit of some of the world's largest companies.

Water bottling consents make up about five per cent of the total consented water takes, and Cloud Ocean Water's allowance amounts to about one per cent of the total allocation in Christchurch.

But other than a few thousand dollars for consents and ongoing monitoring, water bottling companies have little to pay for the privilege.

They do not have to pay for the water itself due to the Government's position that no-one owns it, meaning it cannot be priced and companies can export water for negligible cost.

In January, the Christchurch City Council said it was exploring the possibility of imposing a new levy on the water bottling industry amid frustrations over its ease of access to free resources.

Campaign group Aotearoa Water Action (AWA) is taking legal action against ECan, Cloud Ocean Water and a separate company, Rapaki Natural Resources, accusing the regional council of "bending the law" by allowing the firms to take water from bottling plants in Belfast.

The two companies have permission to take 8.8 billion litres of water a year - the equivalent of more than 24 million litres a day.

AWA co-convenor Peter Richardson said he was surprised Cloud Ocean Water had begun taking water given the threat of legal action hanging over the company, particularly with questions remaining over whether the land the plant is situated on could be contaminated.

He said: "But I am also not surprised because there has been a history of non-compliance and because they have been investigated for health and safety breaches [in the past].

"The issue is that Cloud Ocean can presumably rectify the abatement notice by filling out some paperwork."

Both the Christchurch City Council and WorkSafe investigated Cloud Ocean Water over allegations of unsafe practice and suggestions workers were sleeping on the site.

A court hearing is scheduled for October 2.

Stuff was unable to contact representatives of Cloud Ocean Water for comment.