The move follows a month of very low stream flows in Merrimans Creek, which deteriorated rapidly in a short period of time.

Merrimans Creek provides the drinking water supply for the Seaspray township.

Gippsland Water managing director David Mawer said flows in Merrimans Creek were so low they had now stopped and the corporation had begun carting drinking water to Seaspray from Sale.

"Water restrictions in Seaspray are necessary because there is simply not enough water in Merrimans Creek - it has stopped flowing. We urge residents in the town to scale back their water use wherever they can.''

Mr Mawer said until further rainfall restored flows, a decision as to whether Seaspray moved onto higher restrictions before the end of summer would depend on how customers responded to the stage two restrictions.

"Normal average water use for the town is 700,000 litres a week. If our customers in Seaspray are able to reduce their water use and maintain an overall `town target' of 600,000 litres a week, we will aim to keep restrictions at this level until the system recovers.

"We will regularly advise how water use is going in the town so our customers can see the results of their efforts.''

Full details about stage two water restrictions are available by visiting www.gippswater.com.au or phoning the Gippsland Water service centre on 1800 066 401.