NSW's top water agency has called for curbs on two big coal mines in Sydney's catchment, saying millions of litres of water are being lost daily and that environmental impacts are likely breaching approval conditions.

In a submission to an independent expert panel, WaterNSW said "there is now strong evidence that the environmental consequences in the Special Areas are greater than predicted when the mining was proposed and approved".

Coal mining in Sydney's Special Areas is being reviewed by an independent expert panel. Credit:Peter Braig

Among the recommendations, WaterNSW called for restrictions on future mining at South32's Dendrobium and Peabody Coal's Metropolitan underground mines.

It also called for extra monitoring and analysis to be paid for by miners, and for estimates to be made on how much water was being lost to reservoirs through cracks - caused by subsidence after the coal is extracted - reaching the surface.