EDS has welcomed an announcement from Southdown Holdings Limited, Williamson Holdings Ltd and Five Rivers Ltd that they are withdrawing their applications for effluent discharge consents for large-scale cubicle farming proposals in the Mackenzie Basin.

"This is a step in the right direction but is by no means the end of the story," said EDS Chairman Gary Taylor late tonight.

"The applicants still seem intent on proceeding to seek water consents for irrigation. There is no suggestion in the press release that they are withdrawing those.

"Nor is there any mention of surrendering the land use consents for conversion from tussock grassland to irrigated rye grass and for the very large farm sheds.

"Unless overturned by the High Court the land use consents are valid for up to 5 years. We note with concern the comment in the applicants' press release that they are still convinced cubicle farming in the Mackenzie country is the way to go but that they might be 2-3 years too soon. So we could yet see the proposal resurface.

"It is the land use consents that are the subject of High Court proceedings filed against the applicants and the Waitaki District Council by EDS.

"In a remarkable coincidence, our lawyers are due to meet their lawyers tomorrow morning to discuss procedural matters relating to the High Court challenge.

"At that meeting we will be asking the applicants to clarify (1) whether they are still pursuing the irrigation consents and (2) whether they are prepared to surrender the land use consents.

"Failure to provide assurances regarding these matters would confirm that withdrawing the effluent consent applications is merely another tactical step in the process and that they still intend to pursue the proposal," Mr Taylor concluded.