An environmental group, the Inland Rivers Network, has called for the Rudd Government to amend the 2007 Water Act to create a national wetlands protection program, with explicit laws to prevent water diversion and theft.

It wants future federal management plans for the basin to ensure enough water is set aside to mitigate climate change impacts on wetlands.

Federal Environment Minister Peter Garrett said the report had identified "some of the very real challenges for the future in managing our important wetlands against a backdrop of drought and dangerous climate change".

The report comes as federal delegates are preparing to attend next week's meeting in South Korea of signatories to the global Ramsar treaty on protection of the world's most important wetlands.

Australia has 65 wetlands protected by the treaty: 16 of these are in the Murray-Darling Basin.

But since Australia signed the treaty more than 30 years ago the state of the nation's wetlands had "declined precipitously", creating a national conservation crisis, according to the report.

Reduced river flows caused by over-extraction of water for big irrigation developments in Queensland has killed thousands of river red gums and coolibah trees in the Narran Lakes wetlands of north-eastern NSW.

At least 75pc of the lower Murrumbidgee floodplain wetlands have been lost, and four-fifths of the pelican populations in South Australia's Coorong wetlands had gone.

This decline had taken place despite more than 500,000ha of wetlands across the Basin being listed under the international Ramsar Convention as wetlands of world significance, the report's co-author Amy Hankinson said.

Australia has some of the world's best wetlands ecologists, but their research and warnings about threats to river systems had been ignored, she said.

Climate change is predicted to cut river flows across the basin by 11pc or roughly 2500 gigalitres a year within 20 years.