Coal seam gas projects would be considered for Sydney's sensitive drinking water catchments and landholders will have no legal right to refuse drilling on their land under a state government plan for the controversial industry.

The government hopes the announcement will defuse community angst over coal seam gas mining ahead of the election next March. However voters will not be told where coal seam gas mining is allowed until after the election.

CSG projects in water catchments could get the go-ahead under the state government's plans for the industry. Credit:Robert Pearce

Announcing the plan on Thursday, NSW Nationals leader Troy Grant said coal seam gas was the "most polarising" issue facing the government. The plan would toughen regulation and take a more strategic and transparent approach to releasing land for gas exploration, including better science and data collection.

Resources and Energy Minister Anthony Roberts said the regime would secure the state's gas supplies and drive down prices.