The review, by the economic consultants who advised the federal government on axing Queensland’s Traveston Dam, criticised Hunter Water’s ‘‘limited analytical framework’’ for producing Tillegra as the best option, without adequately exploring alternatives.

Hunter Water’s methodology was outdated, inadequate and lacking in detail, and it did not comprehensively analyse all options, the Centre for International Economics (CIE) told the Department of Planning in a draft review in June.

Hunter Water’s ‘‘zero tolerance’’ of any chance of the region running out of water meant it had failed to adequately consider options with a ‘‘strong chance’’ of resulting in ‘‘a greater improvement in net social welfare compared to Tillegra’’.

‘‘Given the limitations in the analytical framework used by Hunter Water ... we do not support the conclusion that ‘the economic analysis supports the conclusion that Tillegra Dam is the best solution to meet the future water supply needs of the Hunter’.’’

The review recommended a full cost benefit analysis and asked Hunter Water to reconsider other water supply options using a more modern analytical framework, such as that used by Sydney Water in its metropolitan water plan.

The draft review was uncovered in Department of Planning documents tabled after a Greens upper house call for papers.

Greens MP John Kaye said the review was ‘‘severely embarrassing’’ for Hunter Water and the NSW government.

‘‘Planning Minister Tony Kelly will struggle to say that Tillegra has to go ahead in the face of a report that is deeply critical of the project and the planning behind it,’’ Dr Kaye said.

No Tillegra Dam spokeswoman Sally Corbett called on Premier Kristina Keneally to stop further work on the dam. ‘‘The review confirms what community groups have been saying since November 2006 – that Tillegra is not the best solution for the Hunter’s future water needs,’’ Ms Corbett said.

Hunter Water managing director Kevin Young said the CIE review was ‘‘a draft report which Hunter Water has now had the benefit to review’’. The water authority’s response would be incorporated in CIE’s final report.

‘‘There have been claims of better options to provide a secure water supply for our region – yet no one has offered detailed, costed alternatives to Tillegra Dam,’’ Mr Young said.