Concerned Auckland woman Georgia Rose contacted The New Zealand Herald yesterday afternoon after spotting bright green water gushing out of a stormwater pipe and into the picturesque lake.
Hundreds of tourists gathered around to take photos and videos, while Rose tried to follow the creek where the water was flowing.
She could only watch on as the water poured out from a pipe near the children's playground by Queenstown Gardens and then slowly spread across the beach and about 5m out into the lake.
Initial indications were that the substance was poured directly into the creek.
They had taken samples and were this morning still waiting on results.
Herald readers had a few suggestions on what the liquid could be - anything from coolant to marker dye.
Hydrologist Chris Aubin said it was unlikely to be coolant as it was too expensive and wasn't concentrated enough.
"Nah, it's not concentrated enough. It's the same colour as some anti freezes but it's not that concentrated. You'd need tonnes of the stuff and it's hellish expensive.
"Four litres of coolant is $50. So that's enough to put in your car."
Aubin said it was most likely marker dye, a liquid regularly used by councils, their contractors and plumbers for detecting leaks, and university researchers - as he did himself during his hydrology studies.
"It's a freely available product because it's harmless.
"It's just a vegetable dye that's completely non toxic but it's very dramatic looking but it does absolutely no harm to water life or the ecosystem at all which is why it's used quite regularly and there's no restrictions around using it."
"While we believe it may be tracer dye we are awaiting the outcome of testing being undertaken by QLDC to confirm this.
"While tracer dye is routinely used in stormwater networks the amount seen yesterday is far greater than we would normally expect to see."
The regional council used tracer dye "from time to time in carrying out our activities" however "we did not have any role in the substance being in the creek yesterday".
"We will await the outcome of the test results to identify the substance and continue to collaborate with QLDC staff to identify the potential source.
"Should we identify the responsible person or persons we will consider what if any enforcement action may be appropriate."
Aubin said marker dye was extremely concentrated and as little as a cup - or as much as a litre - could have been needed to make the impact in Lake Wakatipu.
"It's very, very concentrated, I'm thinking maybe a cup of it. You'd be surprised how far this stuff goes, it's quite remarkable. You don't need a lot.
"It could even have been a litre. You need bugger all of it. That's why when you buy it, you buy a 3-litre bottle of it."
He said he could understand why it would have caught the attention of people visiting Queenstown.
"It's quite dramatic for people who haven't seen anything like it before. You can see why they would be concerned - 'what is this radioactive stuff?'."
The other scenario was that it was a prank as "council workers wouldn't have been working on a Sunday afternoon".
However, it could also have been a local plumber fixing a leak.
The marker dye tended to stay in the water for "some time" but depending on the movement of the creek's water, it should be gone today.
Aubin said the dye was commonly used in some American cities which dye their rivers green to celebrate St Patrick's Day on March 17.
