A legal fight between dozens of farmers and the Manitoba government over last week's protest at the Portage Diversion has reached a truce, but the farmers and others are still angry over the way the province has handled some flood issues.

The farmers were joined at a protest outside the Manitoba legislature on Tuesday morning by cottage and land owners from around Lake Manitoba, as well as some First Nations.

More than 100 people in all were at the rally, demanding more and better compensation for their flood-related losses and more effective drainage during flood season.

"We want the water bills of 2012 and beyond paid up and we want a permanent solution. We don't want Lake Manitoba [to be] a big drain to pour into Lake St. Martin and continue to give those First Nations people grief," said Joe Johnson, who helped organize the rally.

Farmers say their land near the Portage Diversion and Lake Manitoba has still not fully recovered from the 2011 flood, when the Portage Diversion ran at capacity to redirect as much water as it could from the Assiniboine River.

The diversion, which starts at an inlet near Portage la Prairie and moves the water 29 kilometres north to Lake Manitoba, saved the Winnipeg area from the roaring Assiniboine, but the amount of water it fed into Lake Manitoba caused devastation to many other communities and farmland.

'We've been wronged,' says protester

The lake levels rose so much that land within several kilometres of its shores was flooded out when windstorms pushed the water inland.

Jack King, who lives on the shore of Lake Manitoba, had his home destroyed by those storms.

"I think it's important to show this government that whether a cottager, a homeowner, a fisher; whether you are living in the north, east or west side of the lake, we are together on this," said King, who joined in the protest.

"We've been wronged and we expect the government to do right by us."

Things reached a head last week, when about 50 to 60 farmers blocked the Portage Diversion with their vehicles to halt the province from using it again to lower levels on the Assiniboine.

The province obtained an injunction to remove the protesters. Officials were going to seek an extension of that injunction on Tuesday morning.

However, it now appears both sides have worked out an agreement to avoid further conflict.

Province lets injunction expire

But on Tuesday, the province confirmed that it will let the injunction against the farmers expire, as the farmers have agreed not to interfere with the diversion.

Steve Ashton, the provincial minister responsible for flood matters, said he will meet with the farmers as promised, but he wouldn't say when.

"We indicated as of Tuesday — verbally it was communicated to them — that we're going to meet. And we communicated last Thursday by email that again, subject to the flood, we would be meeting with them," Ashton told reporters.

"I've met with numerous people impacted by the flood; I can go back to 2011. They're no exception."

Ashton said the government also agreed not to seek court costs against the farmers.

"The real issue for us was never the court costs, per se. It was getting them to agree not to block the Portage Diversion," he said. "So it really wasn't a trade-off."

He added that if any more protests happen at the Portage Diversion, those involved will face similar legal proceedings.