Louth County Council is understood to be investigating a large illegal dump, possibly one of the largest in the country.
It is at a location close to the River Fane which supplies water to the Cavanhill water treatment plant near Dundalk.
LCC has confirmed it has begun enforcement action under the Waste Management Acts "in respect of a premises located in the River Fane catchment".
It is understood that initial results indicate that many hundreds of tonnes of what appears to be municipal or household waste, has been found.
It is possible that the waste was mixed with an organic material and then buried but this has yet to be confirmed.
Fianna Fáil TD for Louth, Declan Breathnach said: "I understand this is a highly significant volume of waste and I find it abhorrent and unacceptable that anybody would think they could endanger a vital natural resource.
"It is a blatant disregard for the law of the land and the citizens of Ireland."
LCC said in a statement: "Enforcement action under the Waste Management Acts has been initiated by the Council in respect of a premises located in the River Fane catchment.
"Investigations carried out do not indicate any immediate risk to water quality in the river."
It is understood that a number of concerns were expressed to LCC earlier this year as a result of which they began enforcement proceedings.
However, sources have indicated that as the investigation continued, the scale of the alleged illegal dumping grew significantly.
Irish Water said: "We have all the necessary protection and water treatment barriers in place at the Cavanhill Water Treatment Plant to ensure there is no risk to the public water supply.
"Daily water sampling and monitoring are undertaken to ensure that the water supply fully complies with current EU Drinking Water Legislation."
