Civil or criminal charges over the Havelock North water contamination cannot be ruled out, Prime Minister John Key says.

An estimated 4100 people have suffered from gastric illness following the contamination of the water supply and some 500 were confirmed as due to campylobacter.

Several people have been hospitalised, and a coroner is looking at whether the death of 89-year-old old Jean Sparksman, who had contracted campylobacter, was from other underlying causes or was connected to the infection.

Mr Key told Morning Report government inquiries were often criticised for being toothless, but this was not the case, and civil or criminal charges could not be entirely ruled out.

"Certainly someone's died, now, whether they've died as a result of campylobacter - very, very different issue.

"But you cannot 100 percent rule out civil or criminal charges.

"I'm not saying it would do - or that's the cause - I'm just saying we have to look at everything."

Hastings mayor Lawrence Yule has met with Mrs Sparksman's family and said it would not be known whether campylobacter caused her death until the coroner had issued his findings.

Mr Yule said he understood there were potential ramifications if the bug had killed her.

Mr Yule said Havelock North residents still needed to boil their water, but a UV treatment system being installed by the reservoir by Friday would kill any bugs that chlorine in the water did not.

Mr Yule said it was yet to be established how the water had been contaminated and did not believe the council had done anything wrong.

"I haven't been able to find, so far, a failure of any officer or any technical way we've handled this."

Mr Key will today announce the terms of reference for an inquiry into the outbreak.

He said the terms would be broad and cover a number of issues, including what caused the contamination, whether agencies - including the government - responded appropriately, and what any future learning from the crisis may be.

"So is it an issue that some people might want to say which is there's too much agriculture or too much intensification, or is that intensification, that increase is absolutely fine but something went terribly wrong here and what that something is needs to be identified."

Mr Key said it was unlikely the government would compensate businesses that had lost money because of the outbreak.