Residents say two sinkholes that have developed on a waterfront property on the Parramatta River in Sydney are a result of wash from the RiverCat ferries.

Sally Anne, who preferred not to give her surname, said an engineer told her the rock shelf at the edge of her Henley property on the Lower North Shore was at imminent risk of collapsing.

She said she was now facing a costly repair bill.

"Just because people live on the water doesn't mean they have a lot of money, or doesn't mean that they can just waste money by letting the Government abuse them," she said.

"It's a horrible feeling for us because it's our property that's being damaged."

RiverCats have been ferrying commuters along Parramatta River for 25 years and many residents believe the waves they generate have been eroding the shoreline.

It has now emerged that the New South Wales government received numerous warnings about the impact of the ferries over the past two decades.

One of the sinkholes that has formed on the shoreline of the Parramatta River. ( ABC News: Jackson Vernon )

The Waterfront Action Group, an organisation which represents residents who live on the water, said it had obtained Freedom of Information documents which contained warnings about the problem.

According to group spokesman George Citer, one report to the New South Wales government in 2001 found the RiverCat ferries were "contributing high levels of wash to the shoreline, resulting in the destabilisation of some shoreline structures".

Mr Citer said the government failed to act on the advice.

"I believe we've got state-condoned vandalism on a grand scale," he said.

"It's not only seawalls and other structures, but the riverbed, beaches, mangroves, the whole river system has been affected."

Mr Citer is now organising a potential class action with residents.

"Our members have had to spend hundreds of thousands of dollars on doing repairs to their seawalls," he said.

Principal research fellow at the Water Research Laboratory at the University of New South Wales, Dr William Glamore, said the ferries produced an abnormal wave compared to the other type of boats that had used the river over the past 200 years.

"It's the boat itself that's the problem, not the speed at which it's travelling," Dr Glamore said.

"So that wave means it can travel up, has more energy, it pushes around a lot of sediment and that means that the banks of the river can change and maybe move things beyond what is natural."

Some locals believe wash from RiverCats are eroding the shoreline. ( ABC News: Jackson Vernon )

Maritime director of the Roads and Maritime Service, Angus Mitchell, said the warnings about the RiverCats needed to be taken in context.

"Numerous studies that have been done in the past couple of decades ... do point to some of those causes being man made, but equally they point to natural causes as well," he said.

"Erosion on the riverbanks is firstly caused by clearing on riverbanks, building walls themselves, artificial walls.

"While we acknowledge the RiverCats are a new and introduced factor into that environment, they do sit alongside naturally occurring factors that have a role to play in erosion."

He said the Government was spending millions of dollars on four new ferries that produced less damaging waves.