Victoria must seize the opportunity to build Big Buffalo, to boost water security for irrigators in the north-east, say the Victorian Nationals.
A National Party Water spokesman said Water Minister Lisa Neville had stubbornly refused to make the most of the the federal coalition's willingness to fund priority water projects.
"Expanding the storage at Lake Buffalo is just the sort of big, nation-building project the National Water Grid Authority was established to investigate," Mr Walsh said.
"Big Buffalo has the potential to make water supplies in northern Victoria more reliable and to save up to 130GL of evaporative losses by reducing the system's reliance on Lake Victoria in south west NSW.
"Big Buffalo would investigate increasing the existing dam capacity of 23,900 megalitres - just six per cent of the mean annual flow of the Buffalo River - up to one million megalitres.
"With more secure entitlements, irrigators can look forward to a higher percentage of their water allocations than they currently see each year," Mr Walsh said. "Climate experts are predicting we will see more intense rainfall events and longer periods of drought so we need to make sure we're capturing that rain when it falls."
But Ms Neville said the Nationals knew the project didn't stack up, otherwise they would have done it themselves, when they had the chance.
"Peter Walsh knows full well that expanding Big Buffalo would not create any more water - it would only take more out of the hands of existing entitlement holders," Ms Neville said.
The project would either require changes to the diversion limits under the Murray Darling Basin Plan, or even more water recovery for the environment.
Storing water in Lake Buffalo rather than Lake Victoria would reduce evaporation losses by up to 30 gigalitres per year, but that would be offset by transmission losses of between 30 and 40 GL.
Pumping water through the Broken and Goulburn rivers would add to the environmental problems currently being caused there.