TORONTO -- Environmentalists are urging the Ontario government to deny Nestle a water-taking permit at a well it purchased that was also wanted by Centre Wellington, a small but fast growing community about 100 kilometres west of Toronto.

The township tried to buy the well for its future drinking water supply but lost out to Nestle, which purchased the site as a backup for a well it owns at its bottling plant in nearby Aberfoyle, Ont.

Mayor Kelly Linton won't reveal how much Centre Wellington bid for the Millbrook well site, but insists it was more than Nestle's conditional offer, which the company made while it waited for permission to test the quality and quantity of the water.

"They didn't outbid us," Linton said in an interview. "We put more money on the table and we also had no conditions."

But Nestle waived its request to test the water before the sale and didn't even have to match the township's bid because it had right of first refusal on the site, added Linton.

"They just had to remove their conditions," he said.

Wellington Water Watchers, a non-profit group dedicated to protecting the local watershed, said the Ontario government has to decide between the competing interests of a huge, multinational company and the public's need for drinking water.

"We now have an example that when water is put out to the highest bidder, it looks like the people are going to lose," said Water Watchers' board chairman Mike Nagy.

"The province has to make a very difficult decision here and it's going to be quite a precedent, with the eyes of the world on Canada now."

Nestle insists it didn't know it was competing against the township when it waived the conditions and exercised its right of first refusal to buy the well.

But Nagy said there were two reports published that made it clear Centre Wellington, which is designated for greater development under Ontario's Places To Grow Act, would need a new water supply within 10 years.

"It wouldn't have been a great mystery for them to figure out who was bidding for that well," he said. "We're determined not to see any permits issued for the site unless it goes to the township because the people are going to need that water."

Linton said he appreciates the support the community has been getting from environmentalists and the public, but rejected calls for a boycott of Nestle because the company has followed the existing rules.

"The focus should be on changing the rules so that it gives municipalities more of an opportunity to take water than anybody else," he said. "You can't blame a company that is playing by the rules of the game."

Meanwhile, Nestle is allowed to keep taking up to 3.6 million litres of water a day for bottling from its well in Aberfoyle while the province reviews its renewal application for a permit that expired in July. Nestle can also take up to another 1.1 million litres a day at a well in Erin, another community in Wellington county.

Municipalities, mines, construction companies and golf courses -- in addition to the water-bottling companies -- are allowed to take a total of 1.4 trillion litres out of Ontario's surface and ground water supplies every day.

Premier Kathleen Wynne ordered a review of the province's water-taking permits to be completed this fall, and said she wants new rules specifically for bottled water companies.

"Water bottling is a different kind of industry and we need to treat it differently, Wynne said earlier this month.

Ontario charges companies just $3.71 for every million litres of water after they pay a permit fee of $750 for low- or medium-risk water takings, or $3,000 for those considered a high risk to cause an adverse environmental impact. British Columbia charges $2.50 for every million litres, while Quebec charges $70.

Critics say simply charging companies more won't protect the water, while some environmentalists are pushing for a total ban on giving permits to companies that remove the water for bottling.

Alex and Tyler Mifflin, stars of "The Water Brothers," an eco-adventure TV series commissioned by TVOntario, plan to tie blue ribbons around trees outside the Ontario legislature Friday in a show of support with the people in Centre Wellington in their fight with Nestle.