NEW guidelines have been introduced for development in potable water catchment areas.
But affected landowners are not happy and say nothing has changed.
Under the previous government's guidelines, hundreds of landholders had planning applications for areas in potable water catchments rejected.
In declared catchment areas, unless a property was attached to a sewer, houses could not be built if the density was greater than one dwelling per 40ha.
Protecting water quality was an over-riding priority in planning-permit applications.
In launching the new guidelines last week, state Water Minister Peter Walsh said it had taken a "practical approach" and put more flexibility into the planning process.
He said it would allow land owners to build on properties within potable water catchment areas, provided there was certainty water quality would be protected.
"The new development guidelines put more flexibility in the planning process, enabling a more practical and sensible approach to development in potable catchment areas," Mr Walsh said.
The Landholders Action Group, made up of affected landowners, was "extremely disappointed" with the announcement and called for the scrapping of the 40ha rule.
"The latest (guideline) amendments are largely a case of smoke and mirrors and will do very little to facilitate the rural development that the previous version of the guidelines prevented," LAG spokesman Matt Gorman said.
Mr Gorman said the revised guidelines would not stop the "indiscriminate objection" to the development of rural lots of less than 40ha which were not on town sewerage.
He said the density of dwelling exemptions, which had been inserted, gave the relevant water authorities greater power of veto over any proposal.
The Municipal Association of Victoria welcomed the move but said funding and a collaborative approach was needed to resolve issues.