The Environment Agency said tests at Northern Ireland's biggest illegal dump have no current impact on water quality.
However, examination of Mobuoy dump found potential pathways for pollution that could pose a future risk.
The illegal dump, which is on the outskirts of Londonderry, dates back at least until 2009.
The agency is seeking approval for its plans to deal with the waste.
More than a million tonnes of domestic and commercial waste has reportedly been illegally dumped at the site.
The details came to light as the NIEA gave a presentation to Derry City and Strabane District councillors on Wednesday,
Dozens of environmental protestors gathered outside the meeting at the Guildhall.
Independent councillor Maurice Devenney said containing the rubbish was not the solution to a problem that was "dragging on".
"I would call for all the waste to be taken away and removed completely," he said.
The cost of dealing with the massive landfill at Mobuoy could range from £20m to £250m, depending on how it is handled.