The Western Health Board has confirmed it cancelled testing over 200 group water schemes, following a request from Galway County Council.
The local authority was unavailable for comment yesterday amid mounting concern among communities in the county about the risk to public health.
The Environmental Protection Agency has already expressed concern about the quality of group water schemes generally, with a recent report pointing to e-coli contamination in some 62 per cent of schemes.
Private group water schemes are most prevalent in Galway county, with almost 600.
A 1999 EPA report pointing to gross pollution in such schemes came at a time when the European Court of Justice was taking the government to court over failure to protect water quality.
A spokeswoman for the Western Health Board said yesterday the county council had written to it and informed it that it no longer required testing of some 226 group schemes.
The health board's environmental health officers normally carry out a range of services for the local authority, including routine testing of some 600 group water schemes.
The spokeswoman confirmed that Galway County Council owed it €380,000 for the service.
No explanation has been given by the local authority for its move, but it is expected to prompt a review by the health board of all its services to Galway County Council.
Only two months ago, there was contamination of the water supply on Inis Meain on the Aran islands, which forced most of the island community, and visitors, to drink bottled water. Islanders were critical of the local authority's failure to take early action to notify the public, during the high tourist season.
A spokesman for the Department of the Environment said last night that it understood that Galway County Council had put out tenders for the water quality testing service and had received a tender cheaper than that of the WHB.
However, the health board said it had no knowledge of this.