Mr Cain said ducks seemed to be reluctant to get into the water
Tourism businesses and residents at Llanberis in Gwynedd say they are increasingly concerned about toxic algae on Llyn Padarn
The algae has now been discovered at Llyn Llygeirian, near Llanfechell on Anglesey as well.
The blue-green bloom has worsened since being spotted at Llyn Padarn last month.
Signs warn people not to touch or drink the water, and to keep animals away as it can prove fatal to them.
Environment Agency Wales monitored lakes on Anglesey.
Tests at Llyn Alaw and Llyn Dinam were negative, but the results from Llyn Llygeirian confirmed that potentially toxic algal bloom was in the water.
Last week a similar warning was posted at Llyn Maelog on Anglesey.
Blue green algal blooms can kill fish due to lack of oxygen in the water, and toxins can kill fish, animals and birds.
Llanberis resident Anthony Cain warned the situation could be an "environmental disaster".
"A row of ducklings and mother duck were afraid to venture into the water whilst another duck and duckling were in the green soup," he said.
The green algae can be seen clearly in the water
"This lake is a major tourist attraction and local employer of boat and canoe hirers and outdoor pursuits.
"It is used by fishermen and swimmers, and a home to fish such as char and ducks including goosanders, cormorants, grebes, herons, dippers and kingfishers - all of which are now at risk."
Hefin Jones has run Padarn Rowing (boats) on the lake each summer for the past seven years.
He said his season kicks off when schools break up for the summer holidays.
"I've very concerned about it, but it's out of my hands," he said.
"The last couple of summers have been bad because of the weather so I was hoping for a better time this year.
"According to some of the older residents in the village the bloom hasn't been this bad in 90 years."
Euryn Roberts, the senior environment officer (Anglesey and Conwy team) with the Environment Agency Wales said the recent hot weather and "favourable conditions" on the lake had resulted in the bloom.
"Environment Agency Wales has been involved in a project at Llyn Padarn looking at water quality and sources of nutrients within local rivers, and lakes, since before the latest algal bloom outbreak, and that project is continuing," he added.
"Blue green algal blooms can cause fish kills due to lack of oxygen in the water and the toxins produced can cause sickness and death in fish, cattle, sheep, dogs and birds."