The Welsh authority shall, after consultation with the Severn-Trent Water Authority, prepare a plan for the use for the purposes of recreation of the rights of both authorities to the use of water in Wales and of any land in Wales associated with water.

Any such plan, in so far as it falls to be carried out in the area of the Severn-Trent Water Authority, shall be carried out by that authority in accordance with a scheme agreed between them and the Welsh authority or, in default of agreement, in accordance with any directions of the Secretary of State.

Without prejudice to paragraph 2 of Schedule 3 to this Act, the Welsh authority may acquire by agreement any right to use water in Wales and any estate or interest in, or right over, land in Wales which is associated with water for die purpose of using the water or land for the purposes of recreation.

Where the Welsh authority acquire any estate, interest or right under subsection (3) above which relates to water or land in the area of the Severn-Trent Water Authority, they may instead of using it themselves for the purposes of recreation grant the Severn-Trent Water Authority such derivative estate, interest or right as may be appropriate for enabling that authority to use it for those purposes.

It shall be the duty of a water authority who are carrying out works for or in connection with the construction or operation of a reservoir in Wales which permanently affect one or more communities and are not primarily intended by the authority to benefit the inhabitants of that or those communities to provide, or assist others to provide, facilities for recreation or other leisure-time occupation for the benefit of those inhabitants.

A water authority shall, in discharging their duty under subsection (5) above, consult the community councils of the communities affected in the case of communities having such councils, and in any case the council of any district in which any community affected is situated.