The Baird government has been accused of ignoring the advice of its own agencies in allowing the expansion of underground coalmining into Sydney's protected water catchment area.

The Planning and Environment Department has given the go-ahead to the second stage expansion of Metropolitan Colliery's coalmine, which includes mining under the Dam Safety Committee notification area for Woronora Reservoir.

Waratah Rivulet, which supplies as much as half of the inflow to Woronora Reservoir.

The approval was given despite rejection of the mine's water management plan by the Sydney Catchment Authority (SCA) – which last year made clear its opposition to coal and coal seam gas operations within the notification areas for the reservoirs supplying water to Sydney and the Illawarra.

The SCA also sought legal advice on the possibility of having notification areas legislated as exclusion zones, according to documents obtained under freedom of information. In objecting to the new mining, the authority wrote to the mining company asking it to alter its longwall layout – which Metropolitan declined.