Uralla Shire Council's acting general manager Mr David Aber said significant progress in reducing the arsenic concentrations in the Uralla town water supply had already been made.
"Initial test results show a capacity for significant reduction in the arsenic concentrations," he said.
Further tests need to be carried out over the next couple of days to confirm the results prior to council officially announcing success.
"We have tracked the source of arsenic back from the offtake and further up the creek and tributaries, and identified that the most likely source of the arsenic is from springs feeding the streams entering Kentucky Dam.
"Elevated levels have been measured in the upper waters of the storage."
Mr Aber said the bottled water alert would remain in place until council was confident the supply met the water supply guidelines of less than 0.01mg/L.
He said was very unlikely at the concentration od arsenic present in Uralla's drinking water would produce ill health effects.
Mr Aber also stated that council also able to confirm the following:
. The town water supply was still considered safe for pets and stock to drink.
. Rural residents on tank supplies who have purchased water from the Uralla system are welcome to collect bottled water use it for drinking and food preparation. No testing can be provided and consequently we are asking them to use bottled water and follow the "Do not Drink Alert" as a precautionary measure.
. Bottled water is now being made available from the Invergowrie store.
. We are monitoring the logistics of bottled water supply to ensure that sufficient stocks are at hand.
The town water supply is safe to use for hand washing, showering, bathing, washing clothes, in the garden, for consumption by pets and washing your dishes.
It is recommended, as a precautionary measure, that bottled water be used for drinking, food preparation, making ice, cleaning teeth and gargling.
"At this time there is no estimate for lifting the alert," he said.
"The patience of our local business owners is very much appreciated and especially those who have volunteered to assist us with the distribution of water. Please call in to Uralla and have a cup of coffee and enjoy their friendly service over the weekend as it has not been easy for the Uralla businesses over the last couple of days," he said.
Click here and you can subscribe to everything the Armidale Express has to offer.