The government is opening the way to a new stolen generation, protesters outside State Parliament have warned.
The NSW government plans to introduce controversial adoption laws allowing the forced removal of children from their mothers.
Mary Moore from the Support Group for Children and Parents said she was concerned the proposed law would allow forced adoption within six months.
While she supported the removal of children where there was evidence of abuse or neglect, she was concerned that the legislation would allow for children to be "stolen" from loving families.
"This is very concerning," she said.
"We have a situation where the federal government has continued to apologise for the failures of the system and you have state governments now taking a backward step, to take us back into the dark ages."
The introduction of controversial adoption laws which will make the forced removal of children from their mothers easier has been delayed until next year.
Some ministers have expressed private concerns the legislation could create another "stolen generation", but say they will support it in the hope that adoption is handled carefully.
Premier Barry O'Farrell said the bill introduced in Parliament last week had the full support of his cabinet. But delays in drafting the adoption laws had meant they would not be debated and put to a vote this year.
The opposition spokeswoman for family and community services, Linda Burney, said the legal profession, Aboriginal and community-based disability groups have expressed concerns around the proposed measures on adoption.
"I don't want to have a situation where we are making another apology in 30 years' time," she said. "It's clear the minister had trouble getting this through cabinet.
"The fact Minister [Pru] Goward had to take this submission to cabinet twice showed there was uncomfortableness around some aspects of the legislation."
The proposed laws include provision for the forced removal of children from drug-addicted mothers if they fail to undergo rehabilitation. Women who have suffered domestic violence would also be subject to having their children removed if they do not accept support and remove themselves from ongoing violence.
Representatives of 25 community health, legal and women's centres have written to Ms Goward saying they fear the proposed laws will raise the risk of creating a new generation of children who are "stolen" from their parents.
However, Ms Goward has said there is no possibility of a repeat of the "stolen generation" because open adoption would allow children to stay in touch with their birth parents.
"When we have open adoption, birth parents do stay in contact with the child," she said. "The child does know where it comes from ... its background and its culture and its history.
"There is no possibility of those recurrences because this is really about ensuring that children have a safe home for life, but that they are also in touch with their past and their families."
When she announced the adoption bill, Ms Goward said the laws would make it easier for children in state care to be adopted. The laws would provide a "safe home for life" for many children who are otherwise moved from foster parent to foster parent, multiple times.
The government would provide $35 million in additional funding to implement the reforms, which include provision of early intervention services that start before the child is born.
“The NSW government is not prepared to accept a life of multiple placements in foster care as the best outcome for children whose birth parents are unable or unwilling to care for them," Ms Goward said. “Under these new laws, if an expectant mother with a drug addiction doesn't fulfil their obligations the government will take steps to protect the child.
“These reforms also acknowledge the greater role open adoption, or long-term guardianship in the case of Aboriginal children, can play in providing vulnerable children with the basic need of a safe home for life."
The government provides out-of-home care to more than 18,000 children at a cost of around $800 million each year.
Baulkham Hills MP David Elliott was "optimistic" about the proposed new adoption laws. "Any proposal that will improve the lives of vulnerable children is worthy of consideration," he said.