(1) The Authority may, by notice in writing served on a person who is the holder of a water allocation, reduce the allocation granted to the person, either wholly or in part, if satisfied that it is necessary or desirable to do so—
(a) because a reduction in the flow of the waterway makes it necessary;
(b) to prevent a reduction, or further reduction, in the quality of water in a waterway; or
(c) to prevent damage, or further damage, to an ecosystem that depends on that water from a waterway.
(2) A notice under subsection (1) takes effect at the expiration of 90 days after the date on which the notice was served.
(3) Where the Authority reduces a water allocation—
(a) the amount of water authorised to be taken under a licence to take water to which the allocation relates shall be taken to have been reduced; and
(b) if the reduction is of the whole of the allocation to which the licence relates—the licence to take water shall be taken to have been cancelled.