This doomsday scenario has prompted some of the country's leading groundwater experts to call for a greater push to store treated stormwater and wastewater caused by coal seam gas extraction under the ground. They say that instead of keeping water on the surface in dams and reservoirs where it can evaporate or become polluted, it should be pumped into the ground to refill, or ''recharge'', aquifers - naturally occurring underwater storages.

About 43 per cent of the NSW population either fully, or partially, relies on groundwater. More than 200 towns in the state use groundwater, tapped by sinking bores as deep as 600 metres, as the principal water supply source.

Two local councils in western Sydney, Penrith and Blacktown, have already received federal government grants for feasibility studies into schemes to collect stormwater run-off and store it underground in a managed aquifer recharge - or MAR - project. The water would be used to maintain sports fields at Blacktown International Sportspark in Rooty Hill and Leonay Oval near Penrith.

An MAR administered by a local council in Adelaide has already produced small quantities of drinkable water after it was stored in an aquifer for 12 months.

The director of the National Centre for Groundwater Research and Training, Craig Simmons, said much more was needed to ''waterproof the nation'' despite hundreds of millions of dollars being spent on trying to protect the nation's groundwater resources as part of the National Water Initiative, which emerged from reforms agreed by the Council of Australian Governments.

A recent UNESCO report found the world's groundwater reserves were rapidly being depleted. The report, Groundwater and Global Change: Trends, Opportunities and Challenges, identified Australia's Great Artesian Basin, which underlies 22 per cent of the country, as a groundwater source that had suffered significant decline because of the number of bores and wells being sunk. Professor Simmons said a national groundwater strategy was needed, including guidelines for protecting aquifers from over-extraction by domestic, agricultural and industrial users. Contamination caused by chemicals used in mining and coal seam gas extraction also needed to be addressed, he said.

The NSW Farmers Association expressed concerns at a state government-commissioned report released on July 31 that found coal seam gas drilling and conventional mining were ''unlikely'' to damage fresh water supplies.

But a report into the Namoi water catchment in the state's north-west by the independent consultants Schlumberger Water Services - which based its findings on the details of proposed coalmines and gasfields - said there would be some continuing risks of damage to the aquifers that maintained the rich soil of the Liverpool Plains.

The president of NSW Farmers, Fiona Simson, said the state's water authority would not have the power to prevent developments that risk damaging water resources under rules proposed by the NSW government. She said: "The study confirms our view that a robust aquifer interference policy is essential if agricultural land and water sources are to be protected from damage caused by mining and CSG [coal seam gas] activities."

The National Water Commission, created by the federal government during the recent 15-year drought to manage all water resources, acknowledges there has been an over-allocation of groundwater due to a lack of money for the management, measurement and monitoring of bores and wells. Too many licences to extract the water were issued and in some cases too much groundwater was being extracted as people drilled bores as surface water ran out, the commission said.

There are about 90,000 bores, wells and other groundwater excavations across NSW, including hundreds in the Sydney metropolitan area. Each year they draw about 1000 gigalitres - 1 billion litres make a gigalitre - from aquifers.

''Most Australians are simply not aware that the vast bulk of our fresh water is underground, out of sight, out of mind,'' Professor Simmons said. ''They do not realise it supplies much of the water we see in our surface rivers and wetlands, and hence much of our drinking water.''

Professor Simmons warned that even though the recent drought had broken, authorities should not become apathetic about ensuring future fresh water supplies.

He said despite the federal government's introduction of a National Groundwater Action Plan, which wound up last month, during the drought in 2007 to help manage risks to groundwater quality, ''governance is still far from optimal''.

''What surprises me is how quickly we forget about the last drought. We see five or six of these pretty severe droughts per century. When it rains, it leads to apathy.''

Peter Dillon, a senior researcher with CSIRO Land and Water, said there were as many as 12 sources of water that could be stored underground, from rainwater, to treated waste water and urban run-off. Much of this - and even water used during coal seam gas extraction - has the potential to be stored for drinking.

One MAR at Salisbury, in Adelaide, is already producing small quantities of drinkable water, although it is not yet being distributed to the public. Water is collected by the City of Salisbury and injected under pressure into an aquifer via a bore hole. It is used in parks and gardens and by a nearby housing subdivision for toilet flushing. The process minimises evaporation, land does not have to be dedicated to storage, there are less engineering structures and aquifers have natural filtration properties through sand and gravel.

Dr Dillon said Australia was well advanced in the science of MAR, although the volume of these storages was much less than in countries such as the US or India.

A significant amount of research had been done, and was still being done, on public acceptance of using treated stormwater and wastewater stored in aquifers for use in homes for flushing toilets, watering gardens as well as augmenting drinking water supplies. ''Those options are being explored now,'' Dr Dillon said. ''There is research under way to determine if the recharged water is as safe as the water available from the existing drinking water supplies.''

The manager of groundwater at the NSW Office of Water, Mike Williams, said while MAR had its place, it required specific conditions to succeed. ''Quite frankly, MAR has been oversold and a little more thought needs to go in where it's applied,'' Dr Williams said. ''Blacktown City Council spent a large sum of money doing preliminary work, drilling some holes and got effectively nothing. Its MAR bore went to about 600 metres, and got a flow of a litre and a half a second, which is basically a dribbling tap amount of water. That was unfortunate, and you will get your failures.

''With MAR, care needs to be taken about sighting them technically and then making sure that, socially, the water is acceptable after being injected and re-used and then we have to make sure it's economic for it to go ahead. Quite often you'll find that the projected end user doesn't want to use water that's been recycled.''

Dr Williams said by the end of this year all of NSW will have groundwater sharing plans, which flowed from the COAG water reforms and the National Water Initiative rules from 2008, which set extraction limits.

On its website, the National Water Commission says: ''Unless there is a concerted national agenda to deal with current groundwater challenges in a comprehensive and sustained manner, groundwater resources are likely to become over-exploited and potentially put at risk of contamination.''

The commission says MAR would help manage water resources as ''climate gets drier and hotter, and evaporation further affects surface water storage''. But Professor Simmons warns: ''We are still on track to more than double our water use by mid-century - and there are no big, new water resources to be found. So we have to address the situation by being far more clever in how we manage what we've got.''

What lies beneath Blacktown?

THE Blacktown International Sportspark sits above the Sydney Basin Central aquifer, a vast natural storage where water is held deep underground in spaces between Hawkesbury sandstone.

Built at Rooty Hill to host softball at the Sydney 2000 Olympics, the sports complex has expanded to provide venues for Australian rules - the GWS Giants train there - and athletics and cricket.

Blacktown Council drilled two test bores, with the help of federal grants, to determine if the aquifer was suitable to have waste water injected into it for storage and later used to irrigate the playing fields. Neighbouring council Penrith City is examining a similar scheme to water Leonay Oval.

The $4.4 million exploratory joint project was a NSW first and, if successful, would have collected stormwater run-off from streets and injected into the aquifer through a bore and pump system. The water would have been treated through a specially created wetland before being re-used. There was potential to sell some of the water to industrial users.

But a report to the council last week said: ''The geology appears unfavourable for the development of a managed aquifer recharge scheme.'' The council will now concentrate on developing a surface stormwater scheme. Rather than store it underground, water harvested from stormwater drains will be treated and used to irrigate sports fields.