Water samples taken from Kuressaare on the island of Saaremaa were still contaminated on Monday, dashing hopes residents could return to using tap water.
E.coli bacterium was found in tests on a pipeline which had been clear for the last two days, which indicates that it could be residual contamination, the Health Board said on Tuesday.
As E.coli is dangerous to humans, the agency cannot yet allow the use of drinking water in the city.
"Although we had hoped to see zero on the sample line today, the situation is different and the bacterial contamination is not a trivial case to be lightly declared over," said Leena Albreht, head of the Environmental Health Department at the Health Board.
She said it took 1.5 months to finally clear tanks, pipes, and drinking water at a previous incident in Sõmeru in Lääne-Viru County. In that case, 545 people fell ill and 100 needed treatment in hospital.
At a crisis meeting on Tuesday between Saaremaa Municipality, water company Kuressaare Veevärk, the health board and other partners discussions were held about allowing residents to drink tap water in areas where tests are clear for three days.
Exceptions can be allowed if it is possible to isolate the clean water from contamination, it was said. But no final decisions were made.
Albreht said the agency would still recommend risk groups and children should not drink this water.
The Health Board said people in Kuressaare need to be prepared that this process may take longer than expected and clean drinking water may not return for some time.
On Monday, water was allowed to flow out of pipelines to try and shift the contaminated water. Problems arise when contaminated water pools at the end of pipes.
The number of people being admitted to hospital is stable. Thirteen people were admitted on Sunday and 12 were admitted between Monday morning and Tuesday afternoon for stomach complaints.
Medical help can be obtained from a family doctor or by calling the family doctor's helpline 1220.
Clean drinking water can be collected in a container from tanks in Kuressaare between 10 a.m. to 8 p.m.
Editor: Marko Tooming, Helen Wright