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Ngai Tahu has failed to obtain resource consent to farm 23,000 dairy cows in North Canterbury.
A resource consent panel of Environment Canterbury says the plan to convert 7000ha of forestry land to dairy farms on land next to the Hurunui River poses unacceptable adverse effects.
The resource consent application is one of the first under a water plan introduced under the tenure of the government-appointed Ecan commissioners.
The new water plan allows for a 25% increase in nitrates in the Hurunui River to accommodate more intensive farming expected if a dam is built by irrigators on the Waitohi River, which feeds into the Hurunui.
Ngai Tahu is also a major shareholder in the irrigation project.
The decision may yet be appealed by Ngai Tahu.
A more detailed report will be available in NBR's print edition on Friday