An independent inquiry will be launched into Bundaberg's troubled Paradise Dam amid warnings the dam wall has an "unacceptable" risk of breaking apart during an extreme weather event.
Serious structural and stability issues have been revealed in technical reports released on Friday which found Paradise Dam fails to meet industry standards for gravity dam stability.
A key concern is the strength of bonds between each layer of the roller compacted concrete (RCC) which forms the wall.
"This in addition to other issues identified with the dam to date such as downstream scour and foundation risks, would mean that under enormous pressure .... the dam wall could shear, or effectively come apart," the report states.
"It is well above the tolerable risk line for an existing dam with the societal risk being unacceptable."
The Queensland government and SunWater, the state-owned operator of the dam, began releasing water in September because of concerns about its safety during an extreme weather event like the 2013 cyclone and flood.
The dam's storage level has been progressively lowered over the past 10 weeks and will reach its 42 per cent target level in the next few days.
The reduced level decreases pressure on the dam walls, allowing greater flexibility in an extreme weather event and extra time for evacuations.
However, while lowering the water level will "reduce the risk of failure", major strengthening works will be needed to ensure the dam's long-term stability, according to SunWater.
Despite evidence that Paradise Dam is an unacceptable risk, Natural Resources Minister Anthony Lynham insists it is safe.
"The reports confirm that the dam is safe now," Mr Lynham said.
"However, they do confirm the potential risk of major flooding if there is another extreme weather event like 2013.
"This is why SunWater made the decision to release water and lower Paradise Dam's spillway by five metres."
Paradise Dam was opened by the Queensland Government in 2006 and cost $240 million to build.
In January 2013, a one-in-200 year flood caused major damage to the dam foundations as the Burnett river burst its banks.
Floodwaters flowing at more than 70km/h caused significantly more damage than expected and more than $65 million has already been spent on repairs.
Former Supreme Court judge John Byrne will head the inquiry into the central Queensland dam which will take public submissions on terms of reference to be released next week.