Scientists have found rules put in place to manage the Darling River system have allowed irrigators to extract excess water which has contributed to the death of millions of fish.
An expert panel on Monday handed down a report into three major fish kills at Menindee in far west NSW this summer which found "serious deficiencies" in governance which "eroded" the Murray-Darling Basin Plan and the Water Act.
The panel - convened by the Australian Academy of Science at the request of federal Labor - said the mass deaths were unusual in the combination of their severity, impact on large, older Murray cod and association with low flows.
Hundreds of thousands of dead fish in the Menindee weir pool and neighbouring waterways. Source: AAP
"Our review of the fish kills found there isn't enough water in the Darling system to avoid catastrophic outcomes," panel chair Professor Craig Moritz said in a statement.
"This is partly due to the ongoing drought. However, analysis of rainfall and river flow data over decades points to excess water extraction upstream."
He later told reporters, the Murray-Darling was a "system in crisis".
Labor leader Bill Shorten said the "startling" report presented an opportunity to accept that too much water was being siphoned from the system's northern basin and not enough was heading south.
"We stand on the precipice of trashing Australia's biggest river system," he told reporters in Canberra.
"We know what is happening and we know why it is happening. The only question is what will we do?"
He said a royal commission was a last resort and would wait to see how the government responds before going down that path.
The report said while the drought was severe, it wasn't unprecedented. "More significantly", it noted, was the excess upstream diversion of water for irrigation.
Prior releases of water from Menindee Lakes contributed to lack of local reserves, the report found.
Panel member Professor Richard Kingsford said there's no monitoring of how much water is diverted from floodplains by upstream irrigators.
"There's something between 20 and 50 per cent of water that's being diverted that's not metered," he told reporters on Monday.
Professor Sarah Wheeler, also on the panel, said policy changes have contributed to decreased river flows and increased water diversions in the northern basin.
"The problem is the rules have been set up to allow increased take from irrigators," she told reporters.
Water buybacks from willing irrigators is the most effective way to get water back into the river and the environment, Prof Wheeler added.
The panel also found that engagement with local residents has been "cursory, at best", resulting in insufficient use of their knowledge about how the system is best managed.
It has called for urgent action - within six months - to ensure there is sufficient flow in the Darling River to prevent stratification and blue-green algal blooms.
The scientists have also recommended the establishment of a Menindee Lakes restoration project to determine sustainable management and operation of the lakes system.
Agriculture Minister David Littleproud insists a lack of rainfall was a major factor behind the fish deaths.
"The reality is unless it rains there is no water that runs down the Darling," he told Sky News on Monday.
"To say that anyone has maliciously done the wrong thing is dangerous, it is political and we don't need that."
NSW Regional Water Minister Niall Blair told AAP in a statement there were contradictions in the report and he disagreed with the recommendation to lift the cap on buybacks and to have the Northern Basin review repealed
