The approvals were also granted before the Independent Expert Panel on Mining in Sydney’s Drinking Water Catchment has released its first report, which will detail impacts at Dendrobium and also the Metropolitan coal mine.

A critical issue is the extent that the mining is draining- through subsidence - surface water, drying swamps and potentially diverting flows into reservoirs.

“With no reliable knowledge of how much water is being lost as a result of mining in the Special Areas, Planning have now knowingly allowed mining that’s likely to collapse and shatter the rock above the mining, resulting in the drainage zone reaching the catchment surface," Dr Turner said.

'No evidence of any breach'

Both Planning Department and the mine's owner South32 defended the mining expansion.

The department had sought advice on Longwall 16 from the expert panel, which had "found that there was no evidence of any breach of the strict conditions relating to the loss of water and recommended further water monitoring and management", a spokesman said.

The Longwall 14 was initially approved with conditions, which the department is now "satisfied" they had been addressed, he said.

"Dendrobium Mine operates under a well-established and strict regulatory framework, including stringent performance criteria and comprehensive monitoring requirements," a South32 spokesman said. "We take our environmental responsibilities seriously and our mine plan and operational decisions reflect this."

Sydney is the sole known city to permit mining under its catchment, according  to a 2014 NSW Chief Scientist report.

'Full inquiry needed'

Adam Searle, Labor's energy spokesman, said "protection of our drinking water must have the highest priority".

“There should be a full inquiry into WaterNSW's claims that significant damage and impacts are occurring to the Sydney drinking water catchment due to the Dendrobium Mine operations.”

Jeremy Buckingham, NSW Greens resources spokesman, said the "neutral or beneficial test for development in the catchment is being totally ignored", as were WaterNSW.

"The subsidence and cracking of the geological and altered hydrology of the area due to coal mining will be a long-term problem and detrimental to the environment and the quality and quantity of Sydney's drinking water," he said.

According to WaterNSW's own submission to Planning, "significant damage and impacts are occurring to the Sydney drinking water catchment due to Dendrobium Mine operations, and that mining of Longwall 16 as proposed will result in further increased impacts to swamps, watercourses and storage".

"This is likely to eventually result, or may already have resulted, in unacceptable impacts to the Greater Sydney region’s drinking water supply and to the ecological integrity of the Special Areas," it said.

Fiona Smith, the agency's executive manager for water quality, told Fairfax Media WaterNSW notes the longwall approvals include "a number of conditions to address concerns" it had raised.

"WaterNSW will carefully monitor the mining of Longwall 16 to ensure it operates in accordance with the approval," Ms Smith said, adding the body is also working with the expert panel "to better understand the extent and nature" of the mine's impacts.