Labour's Local Government spokesperson is poking holes in the government plan for water services

Its Three Waters legislation will be scrapped by the end of next week -- with two bills to be introduced to drive the alternative Local Water Done Well.

They're due to pass by mid next year, and will include provisions for a new type of financially independent council-controlled organisation.

Kieran McAnulty says a key issue is balance sheet separation - which allows councils to remove debt and future costs from their books.

He says what the Government announced doesn't enable that, and if they say it does, then that means they don't understand the issue.