Water management reforms in NSW could be undermined by pressure from "certain important stakeholders" and insufficient funds and staff, according to a former official tasked with investigating water mismanagement in the state.

Ken Matthews, tapped by the Berejiklian government after ABC's Four Corners aired allegations of water theft in July, released his final report on Thursday. Community concerns had "if anything, intensified" since his interim review in September, he said.

The final Matthews report raises concerns about the implementation of policies aimed at addressing water theft in NSW. Credit:Louie Douvis

Mr Matthews said that while the government had acted quickly on some advice from that initial report – such as setting up a new Natural Resources Access Regulator – other steps were in doubt.

"I am concerned … about the risks of unwarranted 'watering down' of the reform measures as implementation proceeds," he said, noting ill-defined boundaries between agencies could repeat past compliance failures.