In a decision being interpreted as an attempt to downplay the extent of the Williamtown contamination scandal, the federal government on Friday released new safe drinking water standards for perfluorooctane sulfonate and perfluorooctanoic acid 78 times higher than those set by the United States only last month.

Basing its decision on European data from 2008, the Environmental Health Standing Committee - or EnHealth - has lifted tolerable drinking water standards from the interim level of 0.2 and 0.4 parts per billion for PFOS and PFOA to 0.5 and 5 parts per billion respectively. 

The decision has the potential to dramatically reduce the size of the Williamtown contamination footprint and reduce the cost of the Department of Defence's potential liability in the scandal.

The new data also sets tolerable daily intake levels much higher than US standards, and introduced a new chemical - perfluorohexanesulfonate, or PFHxS - another shorter chain perfluorinated chemical used in fire-fighting foams.

But it's the use of the 2008 European Food Safety Authority's safe levels as a guidance that has left scientists flummoxed.

The Newcastle Herald can reveal that even some of the panel members who were part of that 2008 determination have serious doubts about its relevance.

Philippe Grandjean is an adjunct professor of environmental health at the Harvard School of Public Health, and one of the authors of the report. 

He told the Herald the panel “didn't know what we know now” when it made its decision.

"My opinion is the [Australian] government is relying on science from yesterday rather than today,” he said.

“If they really wanted to rely on tomorrow's science, the way I see it, we are learning more and more about these compounds and they are much more toxic than we thought yesterday.

“I would think a visionary and a precautionary government would want to push the water limits even further down.

“I believe we will soon have convincing documentation that the compounds are more toxic than we thought."

EnHealth considered other global standards with much lower safe drinking water standards, including the US EPA, which made a landmark decision that lowered the safe drinking water standard to 0.07 parts per billion for PFOA and PFOA combined.

But despite the eight-year difference, a spokesman for NSW Health – who have a representative on the EnHealth panel – said its experts found that both the US and EU considered “similar evidence” but “differed in how they applied this evidence”.

“The US EPA relied on mathematical models whereas the EFSA relied on established factors for the variability between animals and humans,” the spokesman said.

But questions have been raised about the motivation behind the decision.

"It's extraordinary," Port Stephens state MP Kate Washington said.

"Every decision that is being made by the federal government confirms the community's sense that their interests are being put last - particularly their health.

"Instead, it appears that government departments are making decisions based on limiting their liability as opposed to doing the right thing and protecting people's health."

Dr Mariann Lloyd-Smith, a senior adviser to the independent National Toxics Network, said she was "shocked" by the decision.

"You wouldn't expect it from a university student or even a high school student," she said.

"Even if they wanted to not take any notice of the US EPA, would you not look at all of the data that has come out in the last eight years before you grabbed a standard that is eight years old?"

The news comes at the same time Anita Bugges is about to become the first Williamtown resident to hand her keys back to the bank in order to escape from the red zone. Ms Bugges, 60, has owned property since the age of 23. But she is now preparing to default on her mortgage payments to protect the health of her daughter Michaela and four-year-old grandson Tristan, who live with her on her Nelson Bay Road property. 

She said she was "gobsmacked' when she heard the decision on the new Australia drinking water guidelines, which left her feeling "thoroughly vindicated." 

"We need to get the hell away from here," she said. 

“They are absolutely trying to squash every chance of anyone getting compensation.

"They are content to leave thousands of people, stranded on contaminated properties, unable to sell them and dying of cancer. 

"I'll go and couch surf with my goods in storage and my dogs in kennels before I stay here any longer." 

Mr Bugges was originally prepared to stay in the area in order to take part in the class action and because her family had access to clean town water. 

That was until a landmark report US EPA report last month found dust was an important exposure pathway for children, who could also ingest the chemicals through hand-to-mouth contact. 

She is now prepared to become "homeless" in order to reduce the chance her grandson may in 20 years develop kidney or testicular cancer - diseases both linked with exposure to the chemicals. 

"He's a small boy who lives in puddles," she said. "His muddy little hands are always touching his face. 

"How do you … stay here when every lungful of dust he's breathing in has PFOS in it?"  

Ms Bugges said she was desperately trying to find a rental within three hours of Sydney but she would not be looking anywhere locally.

She becomes tearful when she admits she has been unable to find new homes for her 10 horses due to their age, but can’t bring herself to shoot them. 

"I loathe it [the Hunter] now," she said.