THE Snowy River Alliance has launched Supreme Court action against the NSW Government.

The action alleges a breach of the terms of the 2002 agreement with the Federal and Victorian governments to revive the iconic river's flow.

Last week, the alliance filed a summons with the court stating the NSW Government's first five-year review of the Snowy Water Licence was invalid.

Snowy River Alliance chairman John Gallard said the licence review was meant to address the issue of the Snowy's environmental flows.

"However, the NSW Government has addressed everything but the state of the Snowy River," Mr Gallard said.

"The Snowy remains on 4 per cent of average annual flow below Jindabyne Dam, although the legislated target is 21 per cent (by 2010)."

Under the agreement, the NSW, Victorian and the federal governments could have agreed to vary the licence to improve environmental flows but no compensation would have been paid to the Snowy Hydro Corporation, whose major shareholder is the NSW Government.