An independent review of water use in the Murray Darling has received a mixed response from basin states.
The Turnbull government says the Murray Darling Basin Authority will review compliance with water use regulations following allegations aired by the ABC's Four Corners that billions of litres earmarked for the environment had been diverted for cotton irrigation in NSW.
The review will look at whether state laws, water licence conditions and statutory instruments are appropriate and being met, the adequacy of water measurement and monitoring arrangements, and whether governance arrangements are strong enough to prevent water theft or misuse.
NSW has welcomed additional oversight in addition to its own and other investigations.
But the downstream state of South Australia says the authority's review will be "toothless".
The allegations of water rorting in NSW "go well beyond any compliance issue and need a full judicial inquiry", Water Minister Ian Hunter says.
Federal Labor's environment and water spokesman Tony Burke has accused the government of offering a process to sweep the allegations under the carpet.
But Queensland and Victoria support the move.
Queensland says it has previously raised concerns about Murray water management while Victoria is waiting on more detail about the review, due to report back to governments by the end of the year.
