CYANIDE has been detected in Rocky Creek Dam which supplies drinking water to much of the Northern Rivers.
Last month, the naturally occurring compound was found in tap water at a level above that recommended under the Australian Drinking Water Guidelines.
Rous Water general manager Kyme Lavellesaid laboratory testing conducted in February found small traces of cyanide in water which had been filtered.
However, all testing since has been clear.
"It's a minute amount," Mr Lavelle said.
The cyanide was detected at a level between .04 and .08mm above the acceptable level of .08mm per litre.
Mr Lavelle stressed these levels were well below that which would cause health problems, according to the Wold Health Organisation's guidelines.
A major storm on January 26, which led to unprecedented flooding at the dam was the likely cause, he said.
"Organic material that has washed into the dam could have caused the cyanide results," he said.
"The dam recently reached its highest level on record.
"It went one metre above the spillway."
The flooding occurred when 250mm of rainfall fell across the region on Australia Day.
Mr Lavelle said it was also within the realm of possibility that the result was erroneous due to some "inconsistencies in test results."
Environmental Analysis Laboratory director at Southern Cross University Graham Lancaster backed up Mr Lavelle's comments.
Mr Lancaster said cyanide along with other compounds such as mercury, arsenic and fluoride were naturally occurring in rock.
"Compared to the rest of the world we are very lucky. We have a very, very high purity water supply," he said.
Rous is working with the NSW Ministry of Health to continue to investigate the situation.
It will also be reassessing its treatment process. However, Mr Lavelle said he had every confidence in the current process.
Rocky Creek Dam supplies water to locations as far south as Woodburn, Lismore in the west and Ocean Shores in the north.
Cyanide is a chemical compound that contains the cyano group.
It consists of a carbon atom triple-bonded to a nitrogen atom.
Most cyanides are highly toxic.
Organic nitriles and isocyanides are far less toxic because they do not release cyanide ions easily.
Cyanide is used as a preservative in the food industry.
It is used in mining for silver and gold to dissolve these metals and their ores.
Cyanide is used in New Zealand to kill feral possums.
It can be used in medical situations to produce a rapid decrease in blood pressure in humans.