Water wars escalate as Victoria slams Murray-Darling power shift

The Andrews government has raised serious concerns about handing over powers to the Murray-Darling inspector-general and former Australian Federal Police commissioner Mick Keelty.

Victorian Water Minister Lisa Neville has outlined her criticism of the Morrison government's plan to hand powers to Mr Keelty in a letter to federal Water Resources Minister David Littleproud.

It comes before a meeting of ministers due on Tuesday next week.

Ms Neville's criticisms follow similar objections that NSW Water Minister Melinda Pavey raised in a sensitive document prepared for cabinet, which warned the state would not agree to hand power to Mr Keelty if it resulted in "duplication of compliance and enforcement activities".

Mr Littleproud said last week he had asked interim inspector-general Mr Keelty to conduct an inquiry into management of the water-sharing agreement after NSW threatened to pull out of the Murray-Darling Basin Plan, amid concerns too much water was being withheld from irrigators and towns. Ms Neville has written to Mr Littleproud saying she, too, has objections.

"I have serious concerns about any connection to the water-sharing arrangements in the Murray-Darling Basin agreement, the short timeline, and the suitability of a compliance and enforcement expert to lead what is described as a hydrological exercise," said the letter, sent last Thursday.

"I have written to the inspector-general about our communities' concerns and expectations that his focus be on floodplain harvesting, allocation, metering, monitoring of large-scale individual water use and licensing arrangements in the Northern Basin.

"I have concerns that the investigation described in your letter won't deal with these longstanding issues ... I will not support any proposal which compromises Victorian entitlements, and do not support renegotiating the agreement."

Mr Keelty's appointment in August as Murray-Darling inspector-general, a position that will require Commonwealth legislation, came after continued allegations of water theft from the river system.

On Monday, the Sydney Morning Herald and The Age reported NSW's Berejiklian government was considering a number of proposals to take to the Murray-Darling Basin Ministerial Council meeting next week, including withholding agreement to transfer compliance and enforcement powers to Mr Keelty.

While Ms Pavey declined to comment on the cabinet submission, a spokesman said NSW was "yet to see what powers the inspector-general is asking for".

Richard Kingsford, the director of University of NSW's Centre for Ecosystem Science, said there was a "real problem" of "warring states, with upstream states dictating to downstream states what's needed".

"We need a neutral umpire here and it's very important because we haven't really had that," Professor Kingsford said on Sunday. "NSW is doing quite a lot on the compliance front, but I do think it's important that an inspector-general can tell other states what a good job NSW is doing.

"It's going to be more believable from a neutral party."

Mr Littleproud declined to comment.

Ms Neville said yesterday: "We support the establishment of the Office of the Inspector-General but have concerns that his focus is in the wrong place."

"There has been a lot of concern about issues in the Northern Basin and the IG should be looking into any wrong-doing there, rather than this review of water sharing arrangements, which seems to have come out of nowhere," she said on Monday.

Ms Pavey and NSW Deputy Premier John Barilaro are pushing to reopen negotiations over the Murray-Darling Basin Plan, threatening to pull out of the deal unless the state is allowed to use 450 gigalitres that it had already agreed to set aside for environmental flows.

Ms Neville's letter to Mr Littleproud makes it clear Victoria will oppose the move at the meeting next week.

"Any reopening of the agreement would penalise Victorian water users for the failure of the other basin jurisdictions to implement similar reforms to increase the resilience of their systems to low flows and destabilise the integrity of the water market," she wrote.