Campaigners say Ipswich's River Gipping is in a "ludicrous" state and have accused Anglian Water of turning it into a "stagnant lake".
Activists say extraction of water for the Alton Water site, combined with dry weather, has prevented a natural flow, leading to a build-up of thick weeds.
Anglian Water has now announced an end to any abstraction of the River Gipping to try to protect the environment in the area.
"The river is being ruined", said Save the Gipping campaigner David Lodge.
"There are ducks walking on the surface that can't get to the water.
"Kingfishers can't fish.
"It's absolutely ludicrous and something drastic has to be done."
The river has now turned green and brown as a result of the build-up of weeds, with activists saying the damage can be seen all the way to Stowmarket.
"If the river had a good head of water, it would be able to flow", said Mr Lodge.
"But because of the extraction, it's like a stagnant lake.
"The Gipping should be something to be proud of, much like the River Orwell.
"But year after year this goes on and it is now in a perilous state."
Following a company investigation, Anglian Water has announced an end to any abstraction of the River Gipping "in a bid to help protect the environment in this areas".
An Anglian Water spokesman said: “We recognise the challenge of balancing water abstraction with environmental flows and we are working proactively to better understand and mitigate environmental pressure in areas like the River Gipping, Ipswich.
“As river levels are currently low due to the ongoing dry weather, and in line with our environmental permits, we have ceased abstraction of the River Gipping in a bid to help protect the environment in this area.
“Overall, between 2020-2025, we have committed to cap public water abstraction as far as practical, whilst also delivering eel protection screening on our intakes to Alton Water.
"We have investigated the wider impact of abstraction on the River Gipping catchment and are working collaboratively with the Environment Agency to identify options for continued environmental improvement beyond 2025."
Mr Lodge and other campaigners say the Environment Agency have been informed of the situation but are refusing to act.
A spokesman for the agency said: “Our records show that the quantity of water that Anglian Water have abstracted from the River Gipping is in compliance with their permit.
“We control how much, where and when water is abstracted through our licensing system. Abstraction licences have conditions on them to ensure the environment and the rights of other abstractors are protected.
“We ask anyone with concerns about water abstraction, to report it to our 24-hour incident hotline on 0800 807060.”
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