UPDATE 1-New Orleans lifts possible water contamination warning

(Updates with warning lifted) By Kathy Finn

NEW ORLEANS, Oct 9 (Reuters) - New Orleans on Tuesday canceled an advisory about possible bacterial contamination of its water supply, the second time in two years that a power outage in its aging water system had prompted a health warning.

"Tests confirmed water in the city is safe to drink," the Louisiana port city's government said in a statement Tuesday afternoon.

Residents had scrambled to take precautions after Monday's three-minute outage at the city's main water plant left water safety in doubt. At least 17 schools were closed, businesses and residents were told to boil water, and some of the city's fabled restaurants brought in ice from outside the region.

City and state officials issued the advisory "out of an abundance of caution" on Monday afternoon for about 300,000 residents on the east side of the Mississippi River, where most people in New Orleans live.

Residents were told not to drink, make ice, brush their teeth or bathe using tap water, nor should they prepare or rinse food with tap water without boiling it first. However, authorities said taking a hot shower using water that had passed through a water heater would be safe.

The city's Sewerage & Water Board director, Marcia St. Martin, said the power outage, which occurred as workers were switching two steam boilers, caused a drop in water pressure that could expose the water supply to harmful bacteria.

St. Martin said a $12 million project to replace two steam pumps by 2014 is under way and further renovations of the main

plant are planned.

But the timing of the warning prompted complaints that most people had already consumed water when the board issued its alert four hours after the power outage.

The Ralph Brennan Restaurant Group, which owns five area restaurants including two within the city, said it was using only boiled or bottled water for cooking and cleaning, and has brought in additional water pumps for restroom use.

School officials said classes would resume on Wednesday.

(Editing by Corrie MacLaggan, Cynthia Johnston, Greg McCune and Paul Simao)