A PETITION has been started to protest against proposed water rate increases by Central Highlands Water.

Hepburn Shire Council Acting Mayor Tim Hayes said he had started the petition in response to the water authority's five year draft water plan.

Under the plan a 55 per cent increase in water rates over five years is proposed to pay for new infrastructure projects, including the $180 million Goldfields Superpipe.

Residents in the Hepburn Shire area will still have to pay for increased water costs because of the superpipe regardless of whether they receive the benefits or not.

With the Federal Government contributing only $31 million of the $90 million it had been asked to pay, it's likely water rates will rise further.

Cr Hayes said he started the petition after listening to community concerns.

"My view is if the council, an elected body, attempted to impose that level of increases on rate payers there would be a riot," Cr Hayes said.

"Water rate payers in towns like Clunes, Daylesford and even Maryborough are being expected to pay for it (the superpipe.) You are really asking communities like Clunes to cross subsidise something they aren't getting any

benefit from."

Central Highlands Water chief executive officer Neil Brennan said among the projects Daylesford would benefit from included the upgrade of the Daylesford Wastewater Treatment Plant and sewer system flow containment projects.

"If Daylesford was charged `system-specific' prices to reflect the actual cost of providing the water and waste water services to this community alone, the cost of the services would be significantly greater," Mr Brennan said.

"The proposed price increases will be subject to an independent audit and decision by the Essential Services Commission who is the economic regulator of the water industry."

Cr Hayes said people could visit his shop, The Widow Twankey's Confectionery Emporium, Fraser St, Clunes and sign the petition. Copies can be sought by phoning 5345 3220.