Illawarra residents and members of the CSG Mining Illawarra group formed a spectacular 3000-person human banner at Austinmer Beach, urging the government to enact a moratorium on coal seam gas mining.

The group also requested a royal commission into the environmental and health impacts of coal seam gas mining. And they want a ban enforced on the mining technique known as hydraulic fracturing, or "fracking", where water, sand and chemicals are blasted into the seam to break up coal and release gas.

Stop CSG Mining Illawarra spokesman Chris Williams said the overwhelming turnout illustrated the community's strong feelings against the practice.

"We are happy with the turnout because I guess it just shows that this community is united in its concern about coal seam gas mining," he said.

"We wanted to announce our key demands so that everybody knows: Apex Energy and most importantly the government."

The meeting was triggered by Apex Energy's recent application to the State Government to sink a test well on Sydney Catchment Authority land. The well has been proposed inside the catchment's "restricted area", near Woronora Dam, and would introduce environmental and health hazards to the Illawarra, according to Mr Williams.

In September 2009, Apex was granted permission to drill 15 exploration wells in the area from Darkes Forest to the escarpment behind Coledale and Austinmer.

"On the question of whether or not this should go ahead, the point is that the community doesn't know and the gas companies don't even know the impacts of coal seam gas," Mr Williams said.

"It's really urgent that we call for a halt to the approval process and immediately instigate a royal commission so we can find out all the information.

Keira MP Ryan Park attended the demonstration.

"I am concerned with the current development that's taking place," Mr Park said.

"I intend on trying to meet with some of the proponents over the next couple of weeks to make sure I also get their side of the story.

"I think at this stage what we need to do is get a bipartisan approach through perhaps an initial parliamentary inquiry ...

"It's a big jump just to go straight into a royal commission. People do not want politics involved in this. What they want is the facts on the table."