THOUSANDS of Kowloon and Hongkong Island residents have been reassured that their drinking water is safe after complaints that it smelled and tasted bad. High levels of ammonia in water reaching the Pak Kong treatment works from High Island Reservoir and Plover Cove had been combatted with extra chlorine and this was to blame for the ''earthy'' smell, according to the Water Supplies Department. The assurance came after tests were carried out on a large number of water samples taken since the first complaints were registered on Wednesday from people living in eastern Hongkong Island and several areas of Kowloon. The department said yesterday that its tap water fully complied with international health standards, but reports from Sai Kung and other parts of Kowloon yesterday said more bottled water than usual had been sold. Areas affected include Ngau Tau Kok, Ngau Chi Wan, Yau Tong, Tseung Kwan O in Kowloon and Eastern District on Hongkong Island. ''It's like drinking pool water,'' said one Kowloon woman. ''I don't know about other people, but I don't want to drink it. It smells really bad.''