The advice was sought by the NSW Upper House select committee of floodplain harvesting, and contrasted to claims made by some southern irrigator groups and cross-bench MPs.

"The circumstances that have obtained for generations are, it turns out, circumstances under which the take of water through floodplain harvesting should be considered (not merely "could be considered") a legal activity," Mr Walker said in the advice.

"That is, of course, not the same as suggesting that this is a desirable state of affairs - but that is a question of policy for legislators."

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NSW Water Minister Pavey said she was hopeful that Mr Walker's advice and testimony will allow them "to move past this battle over the question of legality so we can get on with the job of measuring and regulating floodplain harvesting."

But whether the advice will settle the legality debate once and for all is yet to be seen, with Mr Walker due to give evidence at Friday's inquiry hearing, the final of three conducted this week.

The advice was already being refuted by Southern Riverina Irrigators chairman Chris Brooks. Mr Brooks said "the Water Act 1912 required a license if a work was used to harvest floodwaters."

"For those who didn't have this right on June 30, 2009, the Basin Plan has taken over and it's up to the federal government to sort it out."

The first hearing, held on Monday, saw discussion heat up on the 1993/94 Cap.

Floodplain harvesting legislation has been underpinned by limiting take to the Cap.

But debate centered on the question, has the NSW government illegitimately altered the Cap to reflect updated estimates on the volume of take in 1993/1994?

Witness at the hearing and water consultant for stakeholder groups, Maryanne Slattery, Slattery and Johnson, argued the NSW Department of Planning, Industry and Environment were "cooking up" a new cap, named the "Cap Scenario", in order to claim floodplain harvesting volumes will be licenced within legal limits.

"DPIE ... have argued that floodplain harvesting has exceeded the Cap, and they have bought it back within Cap," Ms Slattery said during the hearing.

"But they're actually talking about the Cap Scenario, which is a new model which has no official status."

The Slattery and Johnson submission also claimed the DPIE had increased the baseline diversion limit (BDL), the estimated amount of take prior to the Basin Plan, to include floodplain water harvesting volumes.

However, the NSW government says adjustments to modelling, and therefore the Cap and BDL, are able to be made according to "best available information".

A spokesperson for Mrs Pavey said there was nothing unusual about revising modelling.

"Every basin state has updated their Cap figures with best available science and NSW is doing it to ensure its BDL reflects what take was happening in 1993/94," the spokesperson said.

"DPIE Water is reviewing modelling now because it is the right thing to do and floodplain harvesting needs to be licenced. The Cap was never a set number, but was agreed as a description in time."

Murray Darling Basin Authority executive director Basin Plan Portfolio, Tim Goodes, clarified that any proposed changes to the BDL could only be made once they've been reviewed by the MDBA through the water resource plan assessment process.

"No NSW water resource plans have yet been recommended by the MDBA for accreditation by the Australian Water Minister," Mr Goodes said.

He also iterated that changes to the BDL do not mean more water is available for use, nor do they change the volume of water required to be recovered for the environment.

"A change to the BDL means that there is an agreed, improved understanding of the volume of water that was available for use immediately prior to the Basin Plan," they stated.

Gwydir Valley Irrigators Association chief executive and witness at the hearing (assisting Barwon Darling Water), Zara Lowien, argued setting the 1993/94 Cap at the level estimated back in 2012 would be ignoring the $50 million investment by the Commonwealth to the Healthy Floodplains Project, which has worked to improve models as part of the floodplain harvesting reform.

"My question is 'do you want NSW to lock in information set in 2012 and ignore the Commonwealth investment in the Healthy Floodplain Project? Or do you want to take on that information and make the best decisions you can with it?'," Ms Lowien asked the inquiry.

"Where we have seen those model outputs change in some of those valleys, like the Gwydir, it doesn't mean there's more water, no one's trying to hoodwink anyone."

However, Ms Slattery argued that if changes were allowed to be made based on "best available information" it led to a situation where models and therefore extraction limits could be updated "at a whim, anytime ... with zero accountability, zero transparency and outside the parliamentary process."

"We have gone through this massive amount of pain and disruption ... and we're now in a situation where someone in a back room can literally just change a number and that changes the limit," Ms Slattery said in the hearing.

Emails from DPIE principal modeller Andrew Brown, uncovered in a call for papers in the NSW Upper House by Greens MP and inquiry chair, Cate Faehrmann, appear to support claims that models have been altered without accountability.

"...senior modellers would use their best judgement to make model refinements and small calibrations to fix issues ... typically without a lot of effort being applied to recording in detail where that info came from and a lot of specifics about why they were changing things," said one email written by Mr Brown on June 3, 2019.

In another email, on July 7, 2018, Mr Brown wrote "MDBA is desperately afraid of the media coverage when it becomes apparent that the number for BDL has gone substantially up".

"There will be immediate claims that NSW is fiddling the figures, closely followed by questions about why MDBA isn't stopping this..."

Ms Faehrmann said the emails "appear to support the allegations we heard on Monday that departmental officials are using 'black box' modelling as a backdoor to legitimise the enormous increase in floodplain harvesting since 1994".

"At the very least these emails suggest that the modelling process can't be confidently relied on, at worst that the modelling is being fiddled to allow irrigators in the northern basin to continue with unsustainable levels of take," Ms Faehrmann said.

A spokesperson for Mrs Pavey said, "the emails provided to the media clearly show the department providing advice on a crucial piece of water reform".

Mr Brown is a witness at Friday's hearing.