Prime Minister Jacinda Ardern admits part of the government's Three Waters bill has caused confusion, and she has asked whether it can be clarified.

The government has tried to clear up some "confusion" over part of its Three Waters legislation, which had left critics nicknaming it "Five Waters".

The reforms aim to put New Zealand's drinking water, wastewater, and stormwater into four regional entities, but have proved controversial, with councils claiming they will lose control.

Under the bill, the four Water Service Entities must give effect to Te Mana o te Wai, and mana whenua would be able to make a 'statement' expressing how an entity should do so.

Te Mana o te Wai refers to the fundamental importance of water in te ao Māori, and is part of the National Policy Statement for Freshwater Management.

But the Finance and Expenditure Committee's report into the Water Services Entities Bill recommends geothermal and coastal waters also be included within Te Mana o te Wai policy.

"In the bill as introduced, Te Mana o te Wai and Te Mana o te Wai statements would only apply to freshwater bodies. However, water services also discharge into coastal water, and may affect geothermal water. We believe it would be appropriate to expand the bill's application of Te Mana o te Wai to these other water bodies," the report says.

It has led to accusations from critics (including former deputy prime minister Winston Peters, and the National Party) that the government's reforms aren't Three Waters, but "Five Waters."

But the prime minister insists that is not the case.

"I've read the legislation, it does not change the scope. It's a reference to the impact that if you pump for instance wastewater into the ocean, it has an impact on coastal water."

But she acknowledges that part of the bill could be clarified.

"It has caused potentially some confusion. So we'll ask the drafters whether there's a way to make it much clearer."

Local Government Minister Nanaia Mahuta introduced a supplementary order paper (SOP) at the bill's committee stage on Tuesday night.

The SOP replaces the definition of Te Mana o te Wai in the legislation, to match the National Policy Statement for Freshwater Management as it was defined in 2014.

"Simply put, it enables us to ensure that from the point of source and extraction of water for drinking water, right back through the taps and discharging water through wastewater or sewerage into its receiving environment to any water body, that we are taking care of the whole system in the application of this particular act," Mahuta says.

Mahuta says the change will improve the way governments thinks about the life-cycle of water.

"When we think about Rotorua, when we think about Taupō, there are pockets of thermal waters that bubble up into those lakes, where there are discharge pipes that go into the lake, we need to be assured that when we return water through our treatment plants back into these water bodies, that we are doing no more harm to the environment," she says.

National Party local government spokesperson Simon Watts criticises the manner in which the change was added to the bill, after public consultation had ended.

"Why was it put in at such a late stage in the conversation, without any ability really for people to be able to make submissions in regards to that?"

National and ACT, which have both pledged to repeal the bill should they win the next election, proposed removing geothermal and coastal waters from the legislation entirely.

Despite the House sitting under urgency for the rest of the week, the government has decided not to rush through all of the legislation. The third reading will be in December.

-RNZ.