The Government will forge ahead with its Three Waters reforms, with the most controversial aspects to the reforms' co-governance proposals largely intact, Local Government Minister Nanaia Mahuta announced this morning.

Ministers appear keen to shift the controversy over the reforms from co-governance fears to fears of privatisation.

The Government has said it is seeking the support of other parties to prohibit the privatisation of the entities without a 75 per cent majority in Parliament - but doing so would require Three Waters reform sceptic National to back an amendment in Parliament, something the party is likely to be reluctant to do.

Mahuta said it was time to forge ahead with the reforms, which have been in the pipes since the Havelock North drinking water scandal of 2016.

"We are now at a point where the case for change is well made and the policy has been robustly tested and improved. We have listened to concerns and now is time to move forward with these reforms."

Ministers have adopted most of the recommendations from a working group which was formed to smooth over the most controversial aspects of the Three Waters reforms. Councils will now have a shareholding in the new water entities.

Mahuta said she acknowledged the "anxiety around change, but ratepayers and local communities cannot keep paying more and more for services that have been underinvested in for too long, and now put their health at risk".

The Government plans to roll water services, currently owned and largely delivered by 67 councils, into four massive water entities.

These reforms have been controversial because, while councils will still own a stake in whatever water company ends up owning their pipes and reservoirs, they will lose effective control over how they deliver water services. Instead, the entities will be controlled by boards that are appointed by a panel, which is appointed equally by councils and mana whenua.

This complicated structure has dragged Three Waters reforms into the wider debate over co-governance.

The Government has now agreed to give councils "shares" in the new water entities with each council getting one share per 50,000 people in its district, which will be rounded up to make sure that each council has at least one share.

Councils cannot sell their stakes without the approval of all other councils in their entity and 75 per cent of residents in the area.

The Government has also agreed to allow the regional representative groups, to whom the board will be accountable, to have mana whenua and council co-chairs and consensus decision-making.

Opposition responds

National local government spokesman Simon Watts repeated the party's position that it is opposed to privatisation.

He did not say whether National would vote for Labour's anti-privatisation amendment. The party would probably need to see the amendment put to a caucus vote first, Watts said.

"We don't support privatisation of local water assets and we don't support Three Waters. Any attempt by the Minister to get National on board with their asset grab is futile.

"We've always said these assets belong to councils and ratepayers. Labour is the only party in parliament talking about taking assets out of ratepayers' hands."

Act Party leader David Seymour said his party would not support the Three Waters reforms, and would return the assets to councils.

He said they did not support the co-governance aspects.

On privatisation, he said the Government was trying to muddy the waters.

What was being proposed would make the situation worse with less accountability. He said there needed to be more resourcing.

He said they did not agree with the share proposal for councils.

MP Simon Court said despite all the spending big councils still did not support it.

Mahuta announced her plan to amalgamate water services last year along with a controversial decision to force councils into the reforms without the ability to opt in or out.

The ensuing controversy forced the Government to commission a working group of councils and mana whenua to review some of the most controversial proposals. However, changes to co-governance and compulsion were excluded from the review.

The working group published its recommendations in March and failed to assuage the controversy around the reforms, particularly because co-governance aspects were left in place.

The Government appears keen to shift the debate to concerns over privatisation, by entrenching a provision in the legislation that would mean the water entities could only be privatised if 75 per cent of MPs agreed, or the Government of the day violated political norms by repealing the entrenching provision. This was a recommendation of the working group.

But this would require the support of 75 per cent of the current Parliament to get over the line, meaning anti-reform National would need to back it.

This is not unthinkable. National leader Christopher Luxon has previously told the Herald he did not favour privatisation of water assets. However, whipping National MPs to vote on such a change would require the party to give this commitment some legislative substance, and to vote in support of a Government amendment to a bill the party fundamentally disagrees with.

Other unknowns, like how the water entities will finance their operation - possibly by water charges on residents - have yet to be decided.

Robertson said that, in the long run, the changes will save people money.

"Fundamentally these reforms are about delivering clean and safe drinking water at an affordable price for New Zealanders. Without reform, households are facing water costs of up to $9000 per year, or the prospect of services that fail to meet their needs," Robertson said.

The Government intends to pass legislation giving effect to the reforms in the current term of Parliament.