Environment Minister Greg Hunt has approved the huge – and hugely contentious – Shenhua Watermark coal mine in New South Wales, sparking outrage from his colleague Agriculture Minister Barnaby Joyce.

Mr Joyce has hit out at the Mr Hunt’s conditional approval for the enormous open-cut coal mine on prime agricultural land in Liverpool Plains.

Shenhua paid $300 million to the former NSW Labor government for the exploration license back in 2008, and now wants to remove 10 million tonnes of coal from the open-cut operation each year for the next 30 years.

The Minister, who is the Member for New England, called the green light “ridiculous”, as it would effect of the best agricultural land in Australia.

Mr Joyce said in a statement that he never supported the Shenhua mine, labelling the approval as “unfortunate”.

“I've done everything in my power to try and stop the mine,” he said.

“We brought about further investigations; we had an independent expert scientific review.

“I've said publicly and privately I don't support this mine. I still don't support this mine and that will remain forevermore my view.

“I think the world has gone mad when apparently you cannot build a house at Moore Creek because of White Box grassy woodlands but you can build a super mine in the middle of the Breeza Plains.”

The NSW Farmers Association has followed the same line, saying the Government has “completely failed the people of the Liverpool Plains”.

Federal Environment Minister Greg Hunt stalled the assessment process (after approval was given by the NSW Government) earlier this year, calling for more scientific research into the Watermark project's potential to damage water resources in the area.

This week, Mr Hunt approved the project until 2046, attaching an extensive list of conditions.

Shenhua needs to provide plans to protect biodiversity and water while also showing how rehabilitation will be managed, prior to the start of construction.

The company must also provide yearly compliance updates.

Mr Joyce told the ABC that the Environment Minister now has the power to halt the project if the modelling is not factual.

“If there's any bright side of this it's that there is a condition ... that if it comes to light that what [Shenhua] said is not the case, as it goes forward in regards to the hydrology, then he has the right to stop the project, so that's something we'll be relying on heavily,” he said.

But even so, the Agriculture Minister is still opposed.

“I never supported a mine in the middle of Australia's best farming country,” he said.

“It's ridiculous to have a mine in the middle of what is some of the best agricultural land in Australia even if it's not directly on that land.”

“Ultimately I think time will prove that it affects the land around it.”

The NSW Environmental Defenders Office has launched legal action, arguing on behalf of community group Upper Mooki Landcare that the NSW Planning Assessment Commission (PAC) failed to assess whether the mine would place a viable local population of koalas at risk of extinction.

The matter will be heard in the Land and Environment Court in August.

Mr Hunt maintains that the conditions imposed on the Chinese miner are robust enough to protect water supplies for the black soil plains.

“The conditions I have imposed have placed the black soil plains off limits for mining. The project area is restricted to the ridge country around Mt Watermark,” Mr Hunt said.

“There will be no impact on the availability of water for agriculture.

“The conditions I have imposed limit water use to less than 0.09 per cent of available groundwater - that's less than 1/1000th of the resource and less than the amount of water from one agricultural bore.

“If there are any impacts on agricultural water supply ... the mine must immediately provide an alternate water supply to farmers.”