CONSERVATIONISTS have welcomed confirmation by the NSW coalition it will scrap the construction of the Tillegra Dam in the Hunter Valley if it wins the next election.

Opposition Leader Barry O'Farrell says the dam, earmarked for a site near Dungog, has been poorly planned and will not solve water shortages in the area.

Farm land, jobs and rate revenue for local councils will be lost if the plan goes ahead, Mr O'Farrell says.

He has called on the government to halt the planning assessment process and ensure no contract is signed ahead of the March 2011 election.

"The Tillegra Dam was never about water security," he said in a statement today.

"Like Sydney's desalination plant, it was an attempt by the State Labor Government at the 2007 election to show they had a water policy after more than a decade of neglect.

"We will not impose an ill-thought out ... dam on the region."

The Wilderness Society has welcomed the opposition's commitment to blocking what it says is an environmentally destructive and economically irresponsible project.

"It's now time for Premier (Kristina) Keneally to follow the leadership of Barry O'Farrell and dump her government's support for this half-billion dollar white elephant," Wilderness Society campaigner James Whelan said in a statement.

The society says the dam will impact on the health of the Williams River, one of the last free-flowing rivers in NSW, which is home to 30 platypus families.

Three independent reports by experts from the University of Technology have dismantled the case for the dam's construction, it says.