Thanks for the information.

It is the water square option in the CIV tab of the terrain editor. Found the best way to place a lake is to create a shallow depression, i.e. the surface level, then paint the water. The painted square orientates to the camera, so will need to make small adjustments to get tangents to a curve. To finish off use the level tool to bring the terrain back over the ragged edges. Recommend making a 'safe' save before starting, then another one before adjusting the terrain.

How did you make those decorative elevated lakes? I cannot seem to find the correct tool in terrain editor.