Australians spent about US$500 million (S$731 million)) on bottled water in 2008, a 10 per cent increase on 2007.

Environmental group Do Something!, which helped drive a ban on plastic bags in Coles Bay in the state of Tasmania, welcomed the NSW government and Bundanoon bans.

'We are very much hoping that this move will get Australians to rethink the half billion dollars a year that they spend on bottled water,' said Do Something! chairman Jon Dee.

But Mr Geoff Parker, director of the Australasian Bottled Water Institute Inc, set up 10 years ago to represent the industry, said the bans were disappointing as they stopped consumer choice and were detrimental to local bottlers and distributors.

'Bottled water does not replace tap water but it does compete with other beverages in the shop fridge or vending machine and the decision to remove quite possibly the healthiest option in this selection does not embrace common sense,' he told Reuters.

'The environmental footprint of one bottle of water of locally produced water would be much smaller than a tin of canned tomatoes imported from overseas, some imported cheese, or French champagne. We need to keep it in perspective.' -- REUTERS