The Coalition Government has eased regulations on livestock grazing in drinking-water catchments.
Water Minister Peter Walsh last week announced changes to planning guidelines for open potable water catchments.
These included easing the rules on stock access to waterways and vegetation buffers.
The previous government's guidelines on applications to subdivide or build stock access to waterways should not be permitted.
However the new guidelines say livestock access to creek and river frontages should instead be minimised.
The amended guidelines also remove a previous recommendation that planning permits should specify a maximum stocking rate for applications in agricultural zoned areas.
The Victorian Farmers Federation welcomed the change and said any removal of stock from waterways should be voluntary and incentive-based.
"Planning (regulations) is not a good mechanism for getting good outcomes for the environment in agriculture," VFF land management committee chairman Gerald Leach said.
"There is yet to be strong evidence stock do significant damage in terms of impact on the quality of the water, so we don't see why there should be a change in that respect."
Victorian National Parks Association spokesman Nick Roberts said the move was a weakening of the Government's river health strategy.
He said that the move was against advice from the Department of Health on water quality.
"This is a backward step – it takes waterway management in Victoria back two decades," Mr Roberts said.
The Victorian peak body for water businesses and authorities, Vic Water, welcomed the planning changes as it gave more clarity to their members.
Vic Water chief executive Tony Wright confirmed they were part of the working group looking at the Department of Health report on the impact of stock in water catchments.
The report, released in April this year, called for the removal of livestock from drinking-water catchments because of the potential impact they had on water quality.