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The Ombudsman's inquiries detected failures to prosecute illegal water works stretching as far back as 2003.

In a 2014 report, the Independent Commission Against Corruption found "systemic problems" in the department, including "weaknesses in poor policy formulation, management, resourcing and business systems".

Mr Hanlon is also heard offering to share government documents."What we might do," he said to the group of irrigator lobbyists, "is set up some sort of, something like Dropbox or something like that, where we can stick documents that we're sharing as just a safe way to get information around between us."He describes some of the information at hand as "ammunition" that can be confidentially used to the group's advantage, and says he will provide internal information stripped of his department's logo."There's a good discussion to be had with a group like this confidentially about at what point do you roll, and start firing those things off?

" Mr Hanlon said."We can put together a few paragraphs for you to assist …

And to this day, no-one has actually addressed those issues in that area." The revelations raise grave doubts about the integrity of the billion Murray-Darling Basin Plan.

Murray-Darling Basin Authority chief executive Phillip Glyde said all responsibility for compliance fell to the states."The measurement, the recording, the compliance activities, the enforcement activities are all vital, absolutely vital to having faith in the Basin Plan," he said."As water becomes more valuable, people will want to know that it is being used fairly."But Four Corners has confirmed that investigations into at least four large-scale cotton-growing operations in northern NSW were underway when responsibility for compliance was transferred to Water NSW, a state-owned company which licences and sells water.

To which he said, 'Yes, it has to be announced that flow in the river is embargoed,'" Mr Barlow said."I thought that would be enough, he was the Minister."Mr Humphries did not respond to a request for a comment.

Warned that he was required under the law to give truthful answers, the manager promised he could retrieve it for the investigators after the interview.

Mr Hanlon also defended DPI's decision to shift compliance out of the department, claiming it had no adverse impact on water investigations and was in keeping with "best practice".

He said it "ensured the organisation responsible for regulation has the detailed understanding of what a regulated entity should and should not be doing and therefore is in a much stronger position to determine if compliance is being met".

The unit had originally been established in the wake of two scathing reports from the NSW Ombudsman which found the conduct of the department in enforcing the state's water laws was "unreasonable and otherwise wrong"."NOW [The NSW Office of Water] failed to implement policies, practices and procedures which ensure breaches to the Water Management Act and Water Act were adequately and effectively enforced," the Ombudsman found in its previously confidential 2013 report.

The department has long faced criticism of its processes.

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Investigators toured the property in August 2015 discovering water meters which appeared to have been tampered with and large-scale pumping that appeared to be "outside of required river heights".

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