Farmers and environmentalists are furious after it was revealed the NSW Government may allow waste water from coal seam gas projects to be reinjected into underground water supplies, rivers or other water supply areas.
The latest draft of the state's Aquifer Interference Policy has been released to the public - not by the Government, but by stakeholders angry that the policy could see their water supplies polluted.
The policy could allow the largest coal and CSG projects to go ahead even if they fail the aquifer interference test - provided they get the tick from the Government.
Also causing anger is a section describing potential ways to deal with waste water.
"Alternative disposal options might include reinjection to an aquifer, discharge to a river, on-selling to a nearby industry, agricultural development or potable water supply," the policy states.
In the Illawarra region and nearby, some CSG well sites are in water catchment special areas.
Stop CSG Illawarra spokeswoman Jess Moore said reinjection was a "ridiculous" way of dealing with waste water.
"There have been ongoing problems with reinjection into aquifers in the US, both from the wells they use to do it leaking, and contamination of aquifers," she said.
"It's hard to see this policy as anything but spin, as it doesn't apply to large scale CSG projects."
A spokesman for Planning Minister Brad Hazzard said the minister would not be commenting on the issue until after the policy was finalised.
NSW Farmers' Association president Fiona Simson said farmers wanted to see water protection backed up in policy, and asked Premier Barry O'Farrell to get involved.
"We have been working hard with government and all stakeholders to get this right, and we will continue to do so," she said.
"It is crucial for NSW to get the framework right so we don't end up like Queensland."
Labor Member for Keira Ryan Park said the aquifer policy was a "betrayal" of the community.
"Thanks to the NSW Liberal Government the CSG waste water may well find its way into our drinking supply when it is injected into the potable water supply and aquifers," he said.
"This is bad news for every resident of the Illawarra.
"The people of NSW expected tougher regulations on the industry, instead they find out the biggest mines in the state won't have to obtain an aquifer interference approval at all.
"This does not reflect the concerns expressed by thousands of people across the Illawarra community," Mr Park said.