THE amount of unregulated water captured and extracted in Australia is equal to almost a quarter of all water handed out in entitlements, a report has found.

The National Water Commission has released Australia's first ever nationwide assessment of water "interception'' by farm dams, floodplain harvesting, stock and domestic bores and forestry plantations.

It found 5600 gigalitres were intercepted annually.

However, because the report measured unregulated activities, it cautioned that broad assumptions were required to extrapolate data and the results should be viewed in light of that.

The commission sees these extractions as a risk to the security of water entitlements and environmental objectives for river systems, and calls for them to be considered in water planning and regulation.

Its Australian Water Reform 2009 report found states and territories were making no effort to identify interception activities or act on them.

NWC chief Ken Matthews said the report would help government understand the extent of unaccounted water use and identify the regions where water interception was of greatest concern.

"These important findings underscore the urgency of the commission's recommendations ... that water interception activities be immediately identified and quantified, and a process for addressing them clarified within the next six months,'' Mr Mathews said.