Wyangala Dam has been cleared for water sport use after the lifting of red alerts for blue green algae.
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A WaterNSW spokesman said two consecutive laboratory analysis results had showed it was now below the red alert level.
With the warning reduced to amber alert the water is now considered to be suitable for water sports.
However, water users are advised to exercise caution.
People have also been advised not to drink untreated or boiled water from the dam due to the risk of stomach upsets.
The spokesman said boiling the water does not "inactivate" algal toxins.
It is also still unsuitable for potable use and alternative supplies or prior treatment of raw water for domestic purposes should be considered.
Dam users are also advised algal numbers can change dramatically with changes in conditions so people should avoid water which is discoloured or gives off an earthy or musty odour.
He said WaterNSW would continue routine water quality monitoring and advise of any changes. You can check on updates by calling 1800 999 457 or going to the WaterNSW website.
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