This article examines public–private interactions in the implementation of the EU Water Framework Directive (WFD). Empirically, the study analyses the processes of master planning in the highly contested arena of hydropower in Austria and Bavaria. While the WFD foresees various legally required, ‘mandated’ types of participation, the instrument of master plans was sought and employed as an additional participatory mechanism to develop strategies for mitigating water pressures caused by hydropower. In theoretical terms, the article contributes to the debate on participatory governance and public–private interactions. An analytical framework is developed and applied that recognizes four forms of public–private interaction: state governing, consultative governance, collaborative governance and lobbying. The study shows that in Bavaria the planning process showed some elements of consultation in the early phases, but later on governmental actors backed out and conventional state governing prevailed. In Austria, state governing and traditional lobbying were found to be the dominant patterns of interaction throughout the process. Neither water administration nor hydropower stakeholders opted for more far‐reaching forms of collaboration. The low levels of participation observed in both case study regions can be explained, on the one hand, by the strategic motivations and interests of the involved actors and, on the other hand, by the distinctive politico‐historical context with special discursive dynamics in energy and climate policy. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment