NSW's regional water minister says his attempt to make changes to water sharing laws in the Barwon Darling Basin was to correct a legislative error - but the opposition claims it was part of an "illegal conspiracy".
Regional Water Minister Niall Blair has been accused of trying to alter a clause of the Barwon Darling water sharing plan to benefit a farmer and National Party donor.
But Mr Blair insists he was just trying to fix a mistake.
"Under advice from the department ... Mr Blair sought to correct an error that was identified in published regulations," a spokeswoman for the Nationals MP said on Wednesday.
Mr Blair's office says he received advice from the Department of Primary Industries that two clauses in the plan, relating to water sharing, contradicted each another.
"The minister was advised these contradictory statements in the same regulation needed to be amended to be consistent with the original intent as announced in 2012," the spokeswoman said in a statement.
Opposition Leader Luke Foley, however, says the National Party was working to benefit a select group of farmers who donate to them.
"A small number of big cotton irrigators have benefited at the expense of farmers and townsfolk downstream," Mr Foley told parliament on Wednesday.
"This is a conspiracy that runs through several National Party ministers, past and present, the department and the office of the National Party leader."
Mr Foley named one cotton farmer he said stole a billion litres of water and later donated to the National Party.
As the opposition peppered the government with queries surrounding water theft in question time, the man commissioned by NSW to investigate the claims announced he had started his inquiry.
"I have been asked to investigate allegations of corruption, misconduct and maladministration in water management and compliance actions in the NSW Department of Primary Industries," Ken Matthews said in a statement.
Along with Mr Matthew's probe, the allegations of water theft raised by the ABC's Four Corners program have been referred to the Independent Commission Against Corruption.
A separate basin-wide inquiry has also been ordered by the federal government.
