Hazeldene's has applied to the EPA to discharge class 'C' treated water offsite on a rural property at Lockwood, ABC reports.

However, nearby residents are worried the water will affect their properties and have formed the Lockwood Clean Living group to fight the plans.

The EPA's Scott Pigdon says Hazeldene's application will be assessed on best practice and a decision will be made in the next month.

"Some of the concerns they have I can understand but they're a little bit varied at this stage, so what I'd like to see, and I've asked the community to do, is to provide some more information and that is coming in the next week," he said.