Auckland's water situation is a matter of national significance, Environment Minister David Parker says.
It comes as the Government has "called in" an application by Auckland Council to take an extra 200 million litres of water a day from the Waikato River as the city continues to stare down a severe water shortage.
That means the application will take an accelerated path to approval, and more than double the city's current take from the river.
The call-in also means the application has been referred to a board of inquiry, which will consider the future of Auckland's water supply.
Parker told Morning Report the proposal to take the extra water had been on the table for seven years, but Parker said the amount of water hadn't been expected to be needed until about 2030.
Parker said the prospect of the largest city in the country running out of drinking water was a matter of national significance.
"One of the things I have asked ... this board of inquiry to look at is alternatives. They clearly need drinking water, a proper question is 'are there affordable alternatives?'."
Desalination plants and using treated waste water for drinking water should both be considered, Parker said.
"Desalination will be prohibitively expensive, that's my guess, but that's for the panel to look at.
"In respect of the treated water, the Waikato River in its lower reaches already has treated water coming from the outfalls of wastewater treatment plants."
The board of inquiry of three people will be led by a current or retired Environment Court judge and the Waikato River Authority will appoint someone to the board.
Asked how he thought Aucklanders would feel about drinking treated wastewater, Parker said that was an issue for the future, but he personally trusted the water he got from Watercare.
Parker he had spoken to the leaders of Waikato River Authority about the water take and said they both understood the situation.
"I don't think people should get the impression that there is a lot of conflict around this. I think everyone is trying to work towards a solution."
Parker said he was confident Auckland would have access to extra water outside the call-in.
"They've already got 25 million litres extra a day in winter when the flow is higher and they are in negotiations to get a transfer of some water that is not being used by someone else who has got a consent for summer. There's consideration of an additional 100 million litres a day for an additional winter take as well.
"I think this is on the way to being resolved."
Today's water storage capacity for Auckland is 55.35 percent and the rolling average daily water use for the city is 398,807 million cubic metres.