Traditional landowners have condemned a plan to raise the wall of Warragamba Dam, claiming the NSW government has failed to fully check the affected area for Indigenous cultural artefacts and sites.
The state government's proposal would see the dam's wall raised 14 metres.
The plan will be subject to federal government approval after the environmental impact statement is released later this year and the final business case is considered.
In March, Australian Associated Press reported the Berejiklian government planned 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 Gundungurra Aboriginal Heritage Association and Gundungurra elders, who represent the traditional lands affected by the dam proposal, say Infrastructure NSW and its consultants have declined to fulfill the archaeological methodology for the EIS.
It's understood the state government hopes to release the EIS by September.
The methodology promises to visit dozens of creeks and rivers with high potential for Indigenous sites, to examine the creation story of the area, and to visit 45 identified locations relating to significant sites in this story, as well as other places of high cultural significance, they say.
However, only 26 per cent of the total land which will be impacted by the dam has been surveyed for cultural artefacts and sites, they say.
They also believe only 19 of the 45 identified locations have been visited, and some of these are incomplete.
The state government cannot release an EIS on the impacts of the project on cultural heritage if the entire area that will be destroyed has not been surveyed, they say.
They say they will not consider the findings of the report until the survey is completed in line with the methodology.
The amount surveyed is "grossly inadequate and does not represent or do justice to our vast cultural wealth contained within the impact area," a statement from the traditional owners said on Thursday.
"The impact that this proposal will have on our cultural heritage and ability to access significant ancestral land will be devastating," the statement says.
"Until the dam proposal is scrapped, we will continue to fight for our lands and our culture."
Give a Dam campaign director Harry Burkitt told AAP that given the amount surveyed, "there is a lot more time that needs to be spent assessing the cultural values of the areas that will be impacted".
A WaterNSW spokeswoman said the Aboriginal Cultural Heritage Assessment is being undertaken in accordance with NSW laws and requirements.
Indigenous stakeholders have been in the field with archaeologists to compile information about the cultural significance and values of the area that may be impacted by the proposal, she said in a statement on Thursday.
This is informing ongoing assessments.
While in draft, the report will be issued to Indigenous stakeholders for consultation, and the department will welcome feedback during this period and when it's on public exhibition, the spokeswoman said.