Murray-Darling basin reform has been further stymied by a senate inquiry that will investigate whose interpretation of the Water Act is correct - Water Minister Tony Burke’s or former Murray Darling Basin Authority chairman Mike Taylor’s.

Mr Taylor said the act stated the health of rivers had to be the primary concern in basin reform, but Mr Burke - and the man he has appointed as new chairman of the MDBA, Craig Knowles - say the act allows environmental, social and economic factors to be considered equally.

Coalition water spokesman Barnaby Joyce said reform based on Mr Burke’s interpretation would be the subject of successful legal challenge as it would not comply with the act.

Senator Joyce secured the votes of Senators Steve Fielding and Nick Xenophon to force a senate inquiry into the issue.

"Mike Taylor, constitutional law expert Professor George Williams and Professor Judith Sloan all agree that the environment takes primacy under the Water Act 2007," Senator Joyce said.

"The Senate inquiry now provides an opportunity for everyone involved in the Murray-Darling Basin reform, and the legal minds with the expertise, to provide practical solutions to improve the Act and insulate it against court challenge."