The council confirmed on Monday night that recent rainfall had done little to improve the situation at Glennies Creek Dam, prompting councillors to forge ahead with moderate level two restrictions.

Those restrictions match the lower Hunter, where the downpours of earlier this month lifted dam levels but failed to alleviate the need to reduce usage.

Deputy Singleton mayor Tony Jarrett said the council had installed a recycled water system in a bid to stem its own usage.

"While it has been a welcome sight to see decent rainfall this month, the prolonged, severe drought conditions have seen Glennies Creek Dam levels continue to fall to their lowest ever levels," Cr Jarrett said.

"And while we can't control the weather, we can control how much water we use."

Singleton's level two restrictions mean outdoor watering can be conducted between 6am and 9am or 6pm and 9pm during summer, or 7am-10am and 4pm-7pm in winter.

Washing hard services with a hose is banned.

The decision on water restrictions came the same day an order that urged some Singleton residents to boil their water was lifted after almost a week.

The precautionary boil water alert had been issued through the council in conjunction with NSW Health after heavy rain contaminated the area's water network.

The order had applied to about 400 residents in the Glade, Gowrie, Maison Dieu and Hambledon Hill areas since last Monday, and had also extended to McDougalls Hill a day later.

On Monday Singleton Council said that dirt had entered the water network during heavy rain on the weekend of February 8 and 9 but testing over the weekend had showed turbidity and chlorine levels had returned to normal.

Manager water and sewer network Katie Hardy said staff would knock on doors to inform residents that the advice, which had urged them to boil water for all consumption, had been lifted.

"Council teams have been hard at work since the boil water alert was issued to drain and clean the reservoirs and scour pipework within the affected area," Ms Hardy said.

"Since the reservoirs were flushed last Thursday and Friday, we've been undertaking regular testing across the weekend that showed the water was back to safe levels with no microbial contamination detected.

"We advise customers to flush their system by running their external tap for 10 minutes, which will be exempt from water restrictions, before drinking the water.

"Council appreciates this situation caused some inconvenience for our customers last week, and we thank you for your patience and understanding."

The council issued thousands of bottles of water during the outage. A standpipe at Maison Dieu will also be recommissioned after it was flushed.

While you're with us, did you know the Newcastle Herald offers breaking news alerts, daily email newsletters and more? Keep up to date with all the local news - sign up here