THE Federal Government has warned it will not deliver its $1 billion for stage two of Victoria's northern irrigation modernisation project until it gains guaranteed access to water savings from its investment.

Last week, the Coalition introduced a disallowance motion in the Victorian Parliament, blocking crucial amendments to the Eildon-Goulburn bulk entitlement that allowed NVIRP water savings to be stored and diverted to the Commonwealth.

Coalition water spokesman Peter Walsh said the Government's amendments failed to deliver on a key promise - that stage two NVIRP water savings would be shared equally between irrigators and the Commonwealth.

Mr Walsh said the Victorian Government's bulk entitlement order stated: "NVIRP stage two will be shared based on future negotiations with the Commonwealth".

The Victorian Farmers Federation has backed the Coalition's call.

In March 2008, the Victorian and Federal Governments signed a memorandum of understanding that stated: "The Commonwealth Government has agreed in principle to fund 90 per cent of the total project costs, up to $1 billion, of the stage two Food Bowl Project in Victoria, subject to ... the delivery of half the gain in additional flows (about 100 billion litres) to environmental flows into the Murray River. This project will also deliver a volume of water for farmers equivalent to that available for environmental flows".

The Weekly Times asked Victorian Water Minister Tim Holding if he would amend and reintroduce the disallowed bulk entitlement to clearly state that the water savings from stage two would be shared equally between irrigators and the environment.

Mr Holding failed to answer the question and instead accused the Opposition and Greens of playing politics with "this desperately needed investment for irrigators in northern Victoria".

Federal Water Minister Penny Wong warned the Coalition it was blocking the delivery of $1 billion to regional Victoria.