The committee was asked for its advice by NSW and Commonwealth planning authorities. It said the effects on the water catchment of mine subsidence "will be severe, irreversible and persistent, and that longwall mining methods are not appropriate in this context".

"Key potential impacts on near-pristine water resources ... are highly likely and will be severe, long-lasting and irreversible.

"Ample evidence is provided from previous longwall mining in the area, supported by the proponent's modelling and assessments of the predicted impacts of subsidence and drawdown."

Dendrobium mine: Land council says no, business chamber says yes

A spokesman for South32 continued to defend the company's science.

"Our expert assessment reports (which have been subject to independent peer review) found there would continue to be no material water loss at a catchment scale, nor any material change in water quality at a catchment scale as a result of the Dendrobium mine extension project, due to its careful design and reduced scale," he said.

"IMC would offset potential subsidence impacts to threatened ecological communities associated with upland swamps, as well as offsets for threatened fauna species for which the upland swamps provide habitat."

"We have committed to offset any surface water losses that do occur from the Dendrobium mine extension project to ensure the project would be a positive contributor to the metropolitan water supply."

Nic Clyde from the anti-coal group Lock the Gate said the scientific panel should be heeded.

"It's very rare for the IESC to take such a strong stance on a project, which highlights just how extraordinarily risky this mine extension is," he said.

"It exposes the fact that the NSW Government never should have resurrected a down-sized version of this dangerous project after it was originally killed off by the Independent Planning Commission last year."

Last month the body in charge of the state's water resources, WaterNSW, told planning authorities it was "very concerned that the safety of the dam may be compromised by the proposed longwall mining".

"The differential movement on the dam walls could cause cracks to open in the dam walls," it said.

The South32 spokesman said its assessments showed otherwise.

"Based on similar extensive peer-reviewed work, no material subsidence impacts are predicted to occur on existing WaterNSW water supply infrastructure due to the project," he said.