A proposal to divert water from a rising salty lake in central Saskatchewan has been sunk, but residents near Quill Lake say something still needs to be done to prevent flooding.

The project would have reduced Quill Lake water levels by diverting fresher water from Kutawagan Creek away from Quill Lake to Last Mountain Lake.

"The Quill Lakes people felt the project didn't go far enough, that it wasn't enough of an inlet to make a huge difference on the rise or to accelerate the decline of that lake," Environment Minister Herb Cox said Thursday.

"Downstream, the Last Mountain Lake folks and into the Qu'Appelle chain, a lot of their concerns were on misinformation I think, on misunderstanding. They seem to feel that it was saline water that was going to be coming downstream, when in fact that wasn't the case."

Cox said the water would have had a "marginally higher" saline content than the water in Last Mountain Lake, but it would be lower than the Quill Lake system.

Quill Lake is a salty lake in a closed basin, meaning there's nowhere for water to naturally drain. It has risen about 6.5 metres since 2005 and another metre would mean an uncontrolled spill of saline water downstream into fresh water lakes.

Kerry Holderness, spokesman for the Quill Lakes Flood Victims' Organization, said the group would like a control structure to stabilize the lake level and prevent flooding downstream.

Holderness said thousands of acres of pastureland, farmland and recreational land around the lake have been lost.

"This project was a very little benefit for anybody around the Quill Lakes. It was protecting the highway and the railway system, and justifiably so, that's something that is very much at risk for next year," said Holderness.

"The project we're looking for is something that will address everybody's needs and that's just too much water. We're looking for a solution that will meet that."

Cox said the Water Security Agency is looking at every option, but he could not give a timeline as to when work might take place.