The Senate has voted to block the Federal Government's changes to the Murray-Darling Basin Plan, which could jeopardise the whole agreement.

The Greens have successfully convinced Labor to help block changes to the plan, which would have reduced the amount of water being returned to the environment in southern Queensland and northern New South Wales.

Key points: The Senate has rejected the Federal Government's changes to the Murray-Darling Basin Plan

The Senate has rejected the Federal Government's changes to the Murray-Darling Basin Plan The changes would have reduced the amount of water being returned to the environment in Queensland and NSW

The changes would have reduced the amount of water being returned to the environment in Queensland and NSW NSW confirms its intention to pull out of the plan, with speculation Victoria could follow

The Opposition and the Government negotiated right up to the vote, but did not reach a compromise.

The New South Wales Government has announced it is preparing to withdraw from the basin plan, with Water Minister Niall Blair saying it has now been hijacked by the Greens and Labor.

"New South Wales under my stewardship will now start the process of withdrawing ourselves from the plan," Mr Blair said.

"We will seek legal advice and unless Canberra can come up with a way to fix this, I won't be attending anymore ministerial meetings in relation to the basin plan."

The Victorian and New South Wales governments had both previously threatened to pull out of the plan altogether if the Coalition's changes were blocked.

The Greens' proposal to block the Government's changes was carried 32–30.

During parliamentary debate, Assistant Water Minister Anne Ruston urged Labor to change its mind and reach an agreement with the Coalition.

"Every single citizen of Australia has a stake in this plan. This is a shared resource," she said.

"It scares the hell out of me that we would suggest that for political reasons … we could actually put this plan in jeopardy."

The National Farmers' Federation has accused Labor of betraying farmers and regional Australia by siding with the Greens.

NFF president Fiona Simson said Labor had effectively thrown a match on the Murray-Darling Basin Plan.

"Labor's actions were at best short-sighted, reckless and politically motivated and at worst, a sign of contempt for regional Australia," she said.

"We risk going back to the bleak days of the water wars where it is each farmer, each state to themselves … a situation that would most certainly be detrimental to the environment and that would see water users down-basin suffer."

She urged Labor to work with the Government to bring the Northern Basin amendments back before Parliament and fend off it's demise.

"The plan is a historic compromise between the five basin states and territories which took 100 years to come to fruition, but in a short space of time has already achieved 77 per cent of the water recovery target and delivered environmental benefits across the basin," Ms Simson said.

Greens senator says plan plagued by scandal

Late last year, the Government attempted to reduce the amount of water being returned to the environment in the northern basin, following recommendations from the Murray-Darling Basin Authority.

Greens senator Sarah Hanson-Young led a vocal campaign to stop that happening, arguing the plan had been plagued by "scandal after scandal".

"Until you [the Government] clean up this mess, there is no way we're going to start to take more water off the river just to give it to those who have already been too greedy by far," Senator Hanson-Young told Parliament.

Labor's Penny Wong said the party could not support the plan being "wrecked" by the Government.

"We want the Murray-Darling Basin Plan to survive. It is the plan we delivered in government," she said.

"But we cannot agree today to reducing the volume of water without the proper assurances that the basin will remain healthy."

Senator Wong added she hoped the plan would survive, amid speculation New South Wales and Victoria will now pull out.

Minutes after the vote, Mr Blair released a statement saying it was "untenable" for his government to remain in the basin plan.

The Victorian Government slammed the Senate decision to disallow the Northern Basic Review, saying it's a "slap in the face" for both irrigating communities and the environment.

"From the beginning the Plan has always involved a review of the Northern Basin and included provisions for the SDL adjustment mechanism. This decision derails that plan," the Government said.

"Without some of the measures contained in the Northern Basin Review it is impossible to actually deliver environmental water to South Australia.

"We want the Commonwealth to investigate all options to overturn this decision."

Changes proposed to ease pressure on farmers

The changes the Government wanted to make were in a bid to ease pressure on farmers in northern NSW and southern Queensland, where communities suffered due to a loss of water for irrigators.

As a result, the authority proposed a reduction in water recovery targets in the north of the basin from 390 gigalitres to 320 gigalitres — a 70-gigalitre decrease.

The move was described as a "sensible balance" between social, economic and environmental interests in the region.

The authority also said reducing the water recovery target would save an estimated 200 jobs in irrigation-dependent communities.

Robert Houghton, a cotton grower from Leeton west of Wagga Wagga, said he is concerned with the direction taken by Greens and Labor.

"The economic study has provided evidence that [the plan] would be a huge disbenefit [sic] to the rural communities of the northern basin if another 70 gigalitres [was taken]," Mr Houghton said.

"I'm hoping that is not purely political but that's what it seems like.

"If that can be changed what else can be changed in the future?"

A 70GL cut creates uncertainty, Mr Houghton said, and farmers considering investing in new technology and infrastructure may pull out.

The Murray Darling Basin holds the irrigation district of the northern basin in "good stead for the next 50 to 100 years", he said.