The NSW government has welcomed the federal auditor-general's expanded inquiry into alleged water theft on the Murray Darling Basin.
Auditor-general Grant Hehir will expand his inquiry to include how the federal Department of Agriculture monitors the performance of NSW under a national Murray Darling agreement.
Federal Labor's water spokesman Tony Burke, who wrote to the auditor-general earlier in the week requesting he investigate the claims, criticised the scope of the NSW government's inquiry.
"The reported terms of reference for the NSW inquiry do not allow an investigation into whether or not what was revealed on 4Corners is representative of wider behaviour throughout the Murray Darling Basin," Mr Burke said in a statement on Friday.
"This is not a review designed to get to the bottom of what is happening in the Murray-Darling Basin."
Mr Hehir said he has agreed to expand the scope of an existing inquiry into the monitoring of National Partnership Agreements.
"I will consider tabling a separate report relating to the NSW issue later this year," Mr Hehir said.
NSW Primary Industries Minister Niall Blair said his department would assist with any requests made by the auditor-general's office.
"NSW is committed to the Murray Darling Basin Plan so we support any work the Auditor General does to achieve the outcome all Basin states are working toward," Mr Blair said in a statement to AAP on Friday.
The former head of the National Water Commission, Ken Matthews, was this week appointed to head the NSW investigation into the theft allegations.
That investigation's terms of reference include investigating water theft at specific properties in northern NSW.
It will also examine whether a senior official helped irrigators undermine the Murray Darling Basin Plan, and whether a major investigation into water management breaches was stymied.
