The Hunter Community Environment Centre has called for a ban on the use and importation of PFAS chemicals until their health impacts are fully understood.
It comes after the National Health and Medical Research Council proposed earlier this week to reduce the amount of the potential cancer-causing chemicals allowed in Australian drinking water.
However, the new levels will not be reduced to the near-zero levels set by the US Environment Protection Authority.
Recent discoveries of elevated quantities of PFAS chemicals in some NSW water supplies have led to dam closures and community concern, particularly in the Blue Mountains.
Hunter Community Environment Centre spokeswoman Johanna Lynch said the group supported increased monitoring of PFAS levels in water ways, however, more was needed.
"With cancer-causing levels already identified in NSW, we are in favour of decontamination measures and a ban on the use and importation of PFAS until such a time that the adverse health impacts can be conclusively determined," she said.
"Research to conclusively determine whether there is a link between cancer or other health impacts and PFAS contamination should be an increased priority for the Australian Government and authorities, and in the interim decontamination measures should be explored."
Water quality expert Stuart Khan said Australians could remain confident the national guidelines incorporated the latest and most robust science to underpin drinking water safety.
But he warned upgrades to treatment plants to meet the lower standards would come at a cost to consumers.
Hunter Water said this week that the Lower Hunter's drinking water supplies already met proposed new guidelines for per-and poly-fluoroalkyl (PFAS) substances.
"A review of our historical water quality monitoring data for the region's distribution network indicates that our drinking water complies with the proposed new PFAS guidelines and is safe to drink, whether we use the current or proposed future PFAS guidelines," a spokesman said.
Ms Lynch said there were myriad contamination threats in addition to PFAS, such as microplastics and heavy metals that potentially affected drinking water supplies.
"It's irresponsible to take bets with our drinking water sources," she said.
"The increased levels of PFAS registered in NSW waterways, as with any contaminant with potential to degrade water quality and risk human and ecological health, necessitates swift and decisive action."
