Scottish Water must build a treatment plant to remove manganese from water supplies at its Loch Eck works in Argyll and Bute.
In January, the Drinking Water Quality Regulator for Scotland issued the company with an enforcement notice requiring the development by April 2012.
The works, which serves about 13,000 people, has experienced elevated levels of manganese since 2008. This does not pose a health risk, but discolours supplies.
In 2008, samples hit levels as high as 173 micrograms per litre – three-times the 50µg/l standard. In 2010, the highest level recorded was 80µg/l.
Scottish Water has tried alternative forms of treatment including removing deposits from the local distribution systems, but these have not worked. The rise in levels is probably caused by changing forestry practices in the catchment.