PREMIER John Brumby has warned Federal Government failure to fund stage two of the Northern Victorian Irrigation Renewal Project would be a setback for irrigated agriculture, the economy and environment.
Mr Brumby's warning follows green group pressure on the Federal Government to abandon its $1 billion commitment to the project.
Victorian Greens water spokesman Greg Barber said stage two should be abandoned given little water had been saved from the first stage of the project.
"Green groups are saying buy back (of irrigators' water) is more equitable," Mr Barber said.
Earlier this month the Auditor General found the Victorian Government had rushed into implementing stage one of the project and failed to consider buying water instead of investing in more expensive irrigation infrastructure water savings.
The Wentworth Group of Concerned Scientists also called for funds earmarked for NVIRP stage two and other irrigation projects to be diverted into buying water.
Mr Brumby said he would be "very surprised" if the Federal Government's changed its commitment to the project.
"Needless to say if there were to be a change it would setback irrigated agriculture in the north of our state and the economy of the region," Mr Brumby said.
"And I think in many ways, just as importantly it would set back the Federal Government as they pursue their worthy environmental goals of seeing more water flowing down the Murray River."
NVIRP chief executive Murray Smith confirmed the stage one works delivered 24,500 megalitres of savings in 2008-09 and were on track to deliver 54,000 megalitres of savings this season.
Goulburn Murray Water believes irrigators' water prices would double within 30 years if the project was never implemented or only stage one was completed.
In contrast the Impact of Modernisation Whole of Life Cost Analysis found water prices would only rise by about 30 per cent in real terms if stage two was completed.
Under stage one of the project the Victorian Government has committed $900 million to automating, lining and rationalising outlets across about 40 per cent of the irrigation network to save 225,000 megalitres of water.
The water savings are to be shared between irrigators, the environment and Melbourne.
The Victorian Farmers Federation water council chairman Richard Anderson said failing to upgrade the rest of the irrigation network to save another 200,000 megalitres would be disastrous.
"You'd end up with 60 per cent of customers who'd have had nothing done," Mr Anderson said.
