The Sydney Morning Herald reported that the CSG banned zones would be extended into villages of the Byron, Singleton, Lismore and Wingecarribee council areas.

Planning Minister Brad Hazzard told the ABC that the buffer zone would apply to 95% of dwellings in the state but acknowledged there could be further adjustments to these boundaries.

“In essence, if you're in a town or a city or a village, what looks like a village, smells like a village you're probably pretty good,” he reportedly said.

According to The Australian, CSG companies will be permitted to drill in Upper Hunter Valley horse or viticulture properties purchased before September 2012. Otherwise, more than 800 of such properties will be considered off limits as part of a “critical industry cluster” in this region.

CSG explorers wishing to drill on the proposed strategic land areas will reportedly need to gain approval from a “gateway panel” staffed by groundwater, agricultural and mining experts.

The NSW Farmers Association has already criticised this process under the Strategic Regional Land Use Policy, which aims to limit further CSG and mining impacts to the agricultural industries.

“The Gateway Process, a key component of the SRLUP, does not rule any agricultural land off-limits, meaning that there is ongoing uncertainty for rural communities and businesses,” the lobby group said.

“In addition, it applies post-exploration, meaning that all parties will go through the risk, expense and uncertainty of exploration in areas where mining may be prohibited. The Gateway Panel has no power to prevent inappropriate projects. In essence, there is no ‘gate’ and no ability for projects to be denied a Gateway certificate.”

The NSW government’s policy direction is emerging as former federal resources minister Martin Ferguson urged it to usher in more development of the state’s CSG resources.

“It can’t sit back and have all these indigenous reserves and basically decide that you can deny industry the opportunity to develop those gas reserves in NSW, when you import 95 per cent of your gas,” Ferguson said, according to the Australian Financial Review.