Shoddy engineering work could have resulted in tons of human waste spilling into Mpumalanga's biggest lake that supplies drinking water to Chrissiesmeer.
The Msukaligwa municipality in the province's eastern Highveld is investigating a possibility that the spillage was caused by shoddy work by its engineers.
Municipality spokesman Surprise Nkosi said: "We know who the culprits are."
The municipality said it was only notified about the problem last week and it was looking at ways of trying to contain the spillage.
Residents say the problem started four years ago when the area was developed and people started building houses.
Nkosi said the problem would be sorted out soon.
No incidents of disease outbreaks had been reported at the time of going to press.
Athol Stark, chairman of Grass and Wetlands Tourism in Mpumalanga, yesterday said the town development was to blame for the spillage.
"The area has been developed to an extent that the sewerage system can no longer cope, resulting in the overflow," he said.
"The ponds are also overflowing and can no longer cope with the volumes of waste," he said.
He claimed that more than 15000 litres of sewage flow into Lake Chrissie daily.
He added that the spillage threatens birds, aquatic species and frogs and will negatively affect the town's tourism income.