The utility is proposing to extract over 300 million litres of water each day from the river to provide a new supply of drinking water for Dublin and the Midlands.
However Irish Water's assurances that it won't impact on Lough Derg haven't allayed the fears of local opposition groups.
Declan Collison of the Shannon Protection Alliance says it could have a devastating effect on tourism.
He says water levels on the lake reached a historic low last May when the ESB dropped the level leading to cruisers running aground on Lough Derg.
The Dromineer based proprietor of The Lake Café is fearful this could be made worse if Irish Water put further pressure on the levels.
