Federal Environment Minister Greg Hunt has “stopped the clock” on a big open-cut coal project in NSW.

Just weeks after it was approved by the NSW Government, Shenhua’s$1.2 billion Watermark coal project has been put on hold.

The mine had planned to produce 10 million tonnes of coal per annum for 30 years, but it appears that intense scrutiny from local farmers, politicians and environmentalists could get in the way.

There is strong concern about the mine’s potential impact on vital water supplies and agricultural lands.

The project has been referred to the Federal Government’s advisory body, the Independent Expert Scientific Panel (IESC).

"I have presented a request for advice to the Independent Expert Scientific Committee, in short I stopped the clock on the Shenhua project to seek additional advice on protecting water resources and aquifers from the best experts in ground water in the country" Hunt said.

"You never take risks with water, not just for children and grandchildren but for centuries hence.

“I want to know everything that we need to know about connectivity [of nearby aquifers],” Hunt said,

“Whether or not there is adequate modelling, about whether or not we have adequate proof, and my decision rests on understanding and protecting the water resources that come under the Federal Environment Act.”

The interruption comes four weeks after the NSW Planning Assessment Commission gave the green light, finding that Shenhua would be able to manage the impacts on biodiversity, air, water, soil and noise.

State member for Tamworth Kevin Anderson welcomed the environment minister’s decision.

“I was uncomfortable and feeling challenged by what the PAC were putting forward - they were saying there's no interconnectivity between the hard rock and the alluvial and I'm challenging that,” he said.

In the days before Mr Hunt’s latest decision, Shenhua Australia chair Liu Xiang criticised the delays in approval.

“To date, after eight years, Shenhua has spent $700 million and has little tangible progress to show for this investment in NSW,” Xiang said.

“The process has been challenging and we have faced many delays and changes to the approvals system which nobody could have foreseen when we first entered the public tender process.

“As an international investor, we have found this experience to be inconsistent with the often proclaimed enthusiasm for offshore investment in this country, particularly in the mining sector.”