The substance - a dye marker called sodium fluorescein - was declared harmless by Lake Macquarie City Council on Thursday, despite it leaving a sea of green still visible a week after it was first detected.

Residents initially thought the creek had been polluted with toxic engine coolant.

Lake Macquarie City Council officers have been investigating the source of the spill that washed down Winding Creek late last week.

The creek runs from Charlestown to Glendale before joining Lake Macquarie.

A council spokeswoman said a number of residents raised concerns about the "bright green substance" on the weekend.

Investigations revealed the source of the dye was GPT Group's Charlestown Square shopping centre.

She said discussions with GPT management were ongoing.

"Council staff visited the site over the weekend to collect samples for analysis," she said.

"While Council has not yet received the laboratory results, it is evident the green substance is fluorescein sodium salt a non-toxic, non-hazardous dye used by a number of government authorities and the plumbing/building industry to test for leaks in waterproofing and pipes."

A Charlestown Square spokesman said waterproof testing was carried out at the shopping centre's future child-care centre last Friday.

He said workers used a dye designed to trace leaks in sewerage and stormwater drains.

"We apologise for any alarm caused by the release of the dye into the stormwater system surrounding the centre," he said.

"We are now liaising with council to improve the communication of any future stormwater testing in the centre.

"Charlestown Square aims to be an overall positive contributor to environmental sustainability and this includes our management of water and waste."

Charlestown resident Joe Friend said two years ago Winding Creek was teeming with frogs, insects, bugs and dragonflies.

On Thursday, it's fluorescent green water appeared lifeless.

The frogs have long since disappeared and the banks of the creek were littered with plastic drink bottles, wrappers, styrofoam and discarded shopping bags.

The headwater of Winding Creek is the stormwater catchment area from the Charlestown Commercial Zone.

Mr Friend said over the past two years Winding Creek had been choked to death by pollution, chemicals and rubbish.

He said garbage was repeatedly washed down drains, near the bottom of Charlestown Square, particularly when heavy rain hits.

The result has been garbage regularly scattered through a section of Winding Creek, which runs away from the CBD behind homes on Park Street towards Cardiff.

Mr Friend said the state of the creek, which was Lake Macquarie council's responsibility to maintain, had been an issue for about two years.

He said the plumbers' dye incident should be a wake-up call for the council to do something to protect the creek.

About 18 months ago the creek was flooded with detergent that saw it bubbling a metre-high with soap suds. The culprit was never identified.

Mr Friend said he looked for dragonflies "all summer" but there were none.

"There are only birds around here now, nothing else lives down here," he said.

"The creek has gotten a lot worse in the last few years and council seems powerless to stop the pollution. Now we have a dead creek that residents shouldn't be responsible for regenerating."

In May last year, the Herald reported on the increasing amounts of rubbish being washed down the creek from stormwater drains.

At the time a spokesman for Charlestown Square said the company was environmentally-focussed and had been rated in the top two categories of the Dow Jones Sustainability Index for the past nine years.

"As part of its redevelopment of Charlestown Square in 2009, GPT installed a rainwater harvesting system across the centre to limit water run-off to the surrounding areas," he said.

"The rainwater is used for Charlestown Square's bathroom facilities, irrigation systems and for a car wash in the centre. The harvesting system includes a large storage tank with a filtration system that was once full feeds filtered rainwater into Winding Creek."

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