The report also calls for an urgent federal study on the impacts of decreased water availability in the basin "as a result of government policy" rather than drought on Australia's future food production.

The Murray Darling Basin is the nation's food bowl, producing just over 40 per cent of Australia's food, and injecting more than $9 billion a year into the national economy.

South Australian independent Senator Nick Xenophon has accused state governments of "gross mismanagement" of the Murray Darling water crisis, urging the Rudd Government to fast-track a federal take over of the river system.

But the Rudd Government has ruled out the possibility, claiming the states will play a vital role in developing a new management plan to be finalised in 2011.

Senator Xenophon said lack of water across the basin was "the most urgent priority" facing Australia.

"It reflects not only environmental failures but also a gross mismanagement over a sustained period by state governments who can no longer be entrusted with acting in the national interests."

The approach by state governments to the management of the Murray Darling basin failed to reflect the urgency required, Senator Xenophon said.

The Senate report, by the rural and regional affairs committee, also questions the independence of the new Murray Darling Basin Authority appointed to oversee the basin plan and accelerate water reform.

It warns more needs to be done to secure a future for regional communities in the Murray Darling and to avoid serious consequences for Australia's future food production.