We have an instrument suspended in a tank of water, we have noticed that a gel like substance is on the cable only where it has touched the water (potable), has anyone seen this before and what causes it?

What type of cable are you using? What voltage and current is the cable carrying? How long has it been submerged in the water? Are you sure that the substance isn't algae?

Might be a cable lubricant or chemical component is reacting.