East Devon District Council (EDDC) said a pollution incident reporting tool (PIRT) was issued as a precaution by the Environment Agency due to “elevated ammonia levels”.
The Environment Agency said: “South West Water are supporting this action by checking their assets, including for any potential misconnections to their sewerage network in the area.”
EDDC said council officers lowered the blue flag and lifeguards would fly the red flag to advise against swimming.
“No swimming signs will also be displayed,” it said.
“We hope we can remove these signs and the red flags as soon as possible.”
SWW said: “The Environment Agency have assured us that they are thoroughly investigating and we will continue to support in any way we can.”