THE window has reopened for Canberra to acquire the water rights to the nation's biggest irrigator, southwest Queensland's Cubbie cotton station.

The Australian reports that Cubbie could end up in government hands if if voluntary administrators fail to sell the struggling operation.

As floodwaters poured into massive dams that can hold enough water to fill Sydney Harbour, promising two full crops of cotton worth up to $280 million, sources told The Australian the administrators were negotiating with the federal government.

The Lower Balonne River, feeding Cubbie, is the only major catchment in the Murray-Darling Basin that does not have secure, tradable water entitlements.

But the Queensland Government is now finalising a resource operations plan for water use there that would allow the commonwealth to purchase the water entitlements.

The process was delayed by a Supreme Court challenge that was resolved only last week, coinciding with a breakdown in negotiations over the sale of Cubbie Station.

A spokesman for Queensland Natural Resources Minister Stephen Robertson said yesterday the resource operations plan would be finalised "as soon as possible".

A spokeswoman for Federal Climate Change Minister Penny Wong said Cubbie Station's administrators may not be the only stakeholders in the Lower Balonne looking to sell their water entitlements.

"There are many irrigators in the Lower Balonne that have expressed interest in selling water to the commonwealth, and it is likely they will be afforded this opportunity now the Supreme Court has made its decision in respect of the river operations plan," the spokeswoman said.

The Australian yesterday became the first media outlet given access to Cubbie since the group of companies controlling it went into voluntary administration in October, after bankers sought urgent repayment of a $320m mortgage.

Read more on The Australian online.