Advisers to the United Nations have expressed concerns about a plan to raise the Warragamba Dam wall because of its likely impact on NSW's iconic Blue Mountains.
The World Heritage Centre, which advises the UN committee in charge of world heritage properties, published its position on the project on Friday.
It noted "with concern" that raising the wall by 14 metres is expected to increase the frequency and extent of inundation of the world heritage-listed site.
"The inundation of areas within the property resulting from the raising of the dam wall are likely to have an impact on the outstanding universal value (OUV) of the property," it said in a draft decision.
It recommends the World Heritage Committee - which will likely adopt the decision at its annual meeting in Azerbaijan from June 30 - urge the NSW and federal governments to submit to it any environmental impact statements for assessment before making a final decision on the project.
It came as hundreds of people marched through Katoomba on Sunday, demanding the federal government step in and protect the world heritage area.
Campaigner Harry Burkitt, from community group Give a Dam, said raising the wall could be the "last straw" that puts the Blue Mountains in danger of losing its UNESCO status.
"The World Heritage Committee has spoken, they don't think it's a good idea - and now it's time for the federal government to step up and stop this dam project," he said in a statement.
The World Heritage Centre in late 2018 asked for further information about the proposal to raise the wall after an advisory body revealed it could flood up to 1000 hectares of world heritage area and 3700 hectares of surrounding national park.
Australia's International Council on Monuments and Sites also warned the federal and state governments that it could result in the Blue Mountains being placed on a list of sites "in danger".
The project came under scrutiny earlier this year after AAP revealed the Berejiklian government was actually planning to raise each end of the wall - the dam abutments - by 17m so it could easily be modified in the future to hold back additional water.
Critics say the plan puts at risk threatened flora and fauna that could be inundated by dammed water in the world heritage-listed Blue Mountains.
The plan will be subject to federal government approval after the environmental impact statement is released later in 2019.
The state government insists it will help prevent flooding of the Hawkesbury-Nepean Valley.
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