FIRST ON 7: There are claims tonight that Sydney's water supply is under serious threat from coal mining activity in and around the Belanglo State Forest, south-west of Sydney.
A 7News investigation has found millions of litres of water will be pumped out of an underground lake.
Deep inside the Belanglo State Forest there are scenes the government, and a big mining company did not want us to see. They are drilling for coal directly through a precious underground lake.
"We've seen them drilling very close to a creek bed which is not legal - who's checking up on these people?" Southern Highlands resident Peter Martin asked.
When locals approached the government to identify Hume Coal's secret drilling sites the protesters were accused of "harassment and intimidation".
It is an ironic allegation for one farmer. So far, Ross Alexander has lost $200,000 in a failed legal challenge to keep the Korean mining giant Posco off his Sutton Forest property.
"They just wear you down, money and the stress you can see it on my face. Look, how come this cancer's come back?"
Residents say the mining has the potential to have serious impacts on the Sydney water supply.
7News can reveal a new study into the Highlands aquifer, which feeds into Warragamba Dam, predicts the Sydney water catchment will be hit hard by mining.
Hydrogeologist Steven Pells predicts that within 10 years at least 100km2 of the water supply will dry-up, losing more than 35 million litres a day.
"They're building a cavern under the ground and they don't want to be swimming while they're down there so they've got to pull all the water out,” Pells said.
"Once we do some modifications to the model it'll probably be a bit more dire."
Hume Coal says it has always complied with the conditions of its exploration licence.
"You take the coal out it's like pulling the plug out of the bath," resident Peter Martin said.
"You cannot fix the aquifer system once it's destroyed."