Work on Victoria's proposed $3.1 billion desalination plant has been given the go-ahead after a court dismissed a claim from a community group to stop it from being built.
A bid by Your Water Your Say (YWYS) to stop work beginning on the project's pilot plant failed, with Federal Court judge Peter Heerey ruling there was no evidence it would cause environmental damage.
Victorian Water Minister Tim Holding said work on the pilot plant would now continue as planned near Wonthaggi in the state's south-east.
This will include drilling, installing pipes, taking earth samples and building underwater units for collecting and discharging seawater.
Outside court, YWYS spokesman John Wright said the group was disappointed with the ruling.
"We are a small community action group fighting for a pristine piece of Victorian coastline," Mr Wright said.
"We have lost, they can start and we don't have any environmental assessment done yet."
The group took both the federal and state governments to court, arguing the pilot plant could cause significant environmental impacts.
The state government did not include the pilot plant works in its application for federal government approval for the project and YWYS argued the works should not begin without receiving that approval.
But Judge Heerey said YWYS had "not provided any relevant or admissible evidence to show the preliminary works will cause environmental damage" and dismissed its application for an injunction on the works.
Mr Wright said while YWYS lawyers felt there were grounds for appeal, the group had used all its funds on the court case to date.
He said the Victorian government would be seeking costs.
"We have done all sorts of community fundraising and we have lawyers working for us at one-third their normal cost and I think we've spent roughly $20,000," he said.
"It's a shame that we are up against people who can provide two silks (Queen's Counsel) in court plus back-up lawyers."
He said the desalination plant would create an eyesore the size of the MCG on a pristine beach and vowed the community would go on fighting it, including picketing at the site.
Premier John Brumby said he was glad the government can now get on with building the plant.
"We need to secure the state's water supply - we've got a number of projects to do that in country Victoria and in Melbourne - and this is about drought-proofing the state to the maximum possible extent," he told reporters.
"So I'm delighted with the court decision.
"We've done everything by the book, we've got on with the job of building the desalination plant and it's a further step forward for the project."
The government has said the project will provide 150 billion litres of water, more than a third of Melbourne's yearly water needs.
It is set to start operating by the end of 2011.
