''You will have farmers against farmers, relatives against relatives, and the only winners will be the lawyers,'' he said.
Mr Davidson's family began farming in the district before World War 1.
He has recently sold the farm but has had a long association with the irrigation scheme that has delivered water from the Lindis River to the Tarras and Ardgour Valleys since the 1920s.
Like many irrigation schemes, it was paid for by the government and Mr Davidson reckons the government has had its money's worth.
''Now those schemes have generated money for the economy for nearly 100 years. So it's not a bad investment.''
However, time is running out for those relying on the existing scheme - with the rights granted by the old Wardens Court due to expire in 2021.
And that is where Mr Davidson, and others in the community, see conflict arising.
Under the Resource Management Act, priority will move away from irrigation towards ensuring the Lindis River has a ''residual flow''.
''So when the pressure comes on in a dry summer, that amount of water is taken away before anyone gets to irrigate,'' Mr Davidson says.
''There's not going to be enough water to go around.
''So if [the new scheme] doesn't happen - and then we have to have this situation of arguing over the water that is left ... this district will implode.''
He believes the pressure has come on Tarras because some people do not like to see a dry river bed as they drive over the Lindis Crossing bridge in summer.
But Mr Davidson believes if the water was not available for irrigation, the small, flat-land farms of Tarras would ''virtually generate nothing'' and ''wouldn't exist''.
When asked why Otago ratepayers should invest $3.5 million plus in the $39.2 million Tarras water scheme - that proposes to use Clutha River water rather than that from the Lindis - Mr Davidson said there were many downstream benefits for the province as a result of exports and the spending of farmers.
''The money goes round, through the system, right down to Dunedin.''
The proposal
To build a scheme that will supply water from the Clutha River to about 40 families in the Tarras district.
The company has resource consent to take 4500 litres of water per second from the Clutha with a maximum per year of 73.6 million cu m.
Irrigation water can only be taken between September 1 and April 30.
Irrigated land would be up to 6232ha.
Part of the area is currently irrigated by water from the Lindis River.
The company is seeking total funding of $39.2 million.
The company proposes the Otago Regional Council purchase $3.5 million of pf redeemable preference shares.
It is hoped the scheme will be fully operational by September 2014.
