"This study into water resources in the Namoi region will help determine the most sustainable allocation of water having regard to agriculture, mining operations and the environment," Senator Wong said.

The Commonwealth's funding is subject to matching funding from the New South Wales Government and from the mining industry.

Objectives of the study are to:

• provide scientific information on water resources in the Namoi catchment;
• advance knowledge and understanding of the quantity and quality of surface and groundwater resources; and
• provide scientific information to benefit community awareness, decision processes in all spheres of government and stakeholders in the agricultural and mining sectors.

The study is to be managed by a steering committee and will draw on scientific and other expertise.

In particular it will examine the connectivity between surface and groundwater in the Namoi catchment, including the Peel River and Mooki River, Gins Leap constriction, Maules Creek and Plan Creek.

Federal Member for New England, Independent MP Tony Windsor, welcomed the funding saying the impact of mining on groundwater was a legitimate concern to the Murray Darling Basin which needs investigation in a scientific sense.

"The Caroona Coal Action Group, Namoi Water, the Namoi Catchment Management Authority, the Liverpool Plains Land Management Committee and the many individuals in the local communities can all take great credit for their persistence on this issue," Mr Windsor said.

"Whilst the battle is not completely over, I would particularly like to thank Liverpool Plains’ farmers, Tim Duddy and Doug Rankin, Namoi Water’s John Clements and Australian Greens Leader Senator Bob Brown and his team for their efforts."