Sharon Coleman from the Highlands Motor Inn said she was disgusted after starting her washing.

"I was really mad. We were aware of the dirty water issue, but this was beyond a joke," she said.

"It wasn't just dirty water, it was mud coming through the pipes. I contacted council and they said I should use Napisan to get the stains out. This is beyond soaking; the linen is ruined.

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"I'll have to replace the white towels that are very expensive. Since COVID, we have strict guidelines to adhere to.

"I don't know how I'm going to replace everything in time for the school holidays and Mayfield Garden's spring opening. We are booked out and the last thing we want is a bad review of any sort."

Mrs Coleman added that she can't expect her customers to shower in dirty water.

"I think this should be a priority for council to sort out. They told us to run our water for 10 minutes and try again. This has not solved the problem," she said.

Vicki Walsh, who owns the Laundry Pad, has the same problem. All her linen she hires out to bed and breakfast facilities is ruined.

"Monday is my busiest day and customers are waiting to pick up their linen. I can't wash anything," she said.

"I've been running machines with nothing in them to try to clear the water, but after three washes, nothing has changed. I phoned council, who were very apologetic, but I'm yet to see anyone who can fix the problem."

The issue of dirty town reticulated water was raised at Oberon Council's ordinary meeting last week.

Technical services director Chris Schumacher said because the dam is so low, the water has a high concentration of manganese which tends to cling to water pipes.

Mr Schumacher's report to council said the source of this dirty water is still yet to be determined and flushing the mains is the only solution at the present time.

Acting mayor Mark Kellam said on Monday afternoon that council staff were starting a complete flush in Dart Street, where the Highlands Motor Inn is located, through the CBD and past the Laundry Pad.

On Tuesday, Oberon Council was continuing to work to resolve the water discolouration problem.

A council Facebook post said the flushing program had been accelerated in an attempt to have the problem resolved quickly.

"Council staff have adopted a plan of progressive fast flushing around the reticulation system which has started by flushing the dead end mains and the extremities of the system," the post said.

"Due to the elevated number of community concerns regarding the colour of the water, staff have ramped up the flushing process and will continue on a daily basis in multiple locations.

"The Department of Infrastructure, Planning and Environment have reassured council that the quality of water is suitable for drinking. Current data available from the treatment plant indicates that the manganese levels are dropping, and the turbidity level is almost zero, which all indicate that the treatment plant is operating within guidelines ... this program will continue until clear water is being obtained."