Consumption of fish, prawns and mussels from the entire lakes system was banned by the Health Department earlier this month after an outbreak of toxic blue-green algae in waters east of Paynesville.

The algae has also meant there are warnings against some recreation activities, such as swimming in eastern parts of the lakes, just as city dwellers arrive for a summer break.

Locals fear the blue-green algal blooms - the worst in more than a decade - will hurt the crucial tourism industry during the busy summer period. The ban on seafood consumption has also temporarily thrown 20 families in the fishing industry out of work.

The algae is expected to persist for at least another month as hotter and calmer summer weather sets in.

Dale Sumner, general manager of Lakes Entrance Fisherman's Co-op, said sales of fish from the lakes around the Christmas season - locally and in Melbourne - were often two or three times higher than other parts of the year.

''Those commercial guys are out of work with no other income stream while the ban is in place, and there are a lot of other businesses in town which rely on recreational fishing,'' he said. ''It puts a dark cloud over the entire region for tourism.''

Arthur Allen, a commercial fisherman around Jones Bay and Lake King, slammed the handling of the initial round of tests for algal toxins in fish, which led to the ban, as a ''monumental blunder''.

After complaints from locals that the toxin tests were done on whole fish, authorities are now conducting a new round on gutted and filleted fish. Results are due tomorrow.

Tourists are also being urged to keep their holiday plans, despite the algal outbreak.

Daniel Mainville, Department of Sustainability and Environment deputy incident controller, said the lakes west of Raymond Island were still open for all forms of recreation.

Punters can also still boat in the algae-affected lakes east of Raymond Island, and catch-and-release recreational fishing is allowed across all the waters.

Agriculture Minister Peter Walsh said he felt for the fishermen as ''this [algae] event comes at a time in the year when seafood is at a premium.

''People need to remember there's a lot more to Gippsland and the lakes region than fishing on the lakes,'' he said.

''The region offers some fantastic marine fishing and recreational fishing in other inland waterways.''