NSW Premier Dominic Perrottet says he's committed to getting the Warragamba Dam wall raised as downstream farmers pile on the pressure amid the state's devastating floods.
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But Mr Perrottet wants the federal government to go 50-50 with the state to finance the controversial project.
"This is a project in the billions of dollars, it is not a simple project," he said on Friday.
The premier said it was not the only solution as well at a time when the state has been warned to pull back from major infrastructure projects during the current economic turbulence.
NSW Labor leader Chris Minns was sceptical about the project and said he would like to see more money thrown into evacuation routes for flood-affected areas.
"I would have thought that would be the absolute priority," he said.
"You could actually see a situation that's improved as a result of state government money going into those communities, lifting the infrastructure, the evacuation routes for communities in flood-prone areas."
Mr Perrottet has been touring flooded areas along with Emergency Services Minister Steph Cooke.
Friday's dose of sunshine has sparked warnings from authorities not to think the worst of the floods are over, with waters still high and the risk of landslips remaining.
About 47,000 NSW residents remain under evacuation orders, with 50,000 being told to return home with caution.
Financial relief for flood-affected communities was extended overnight to six additional local government areas, bringing the total of disaster-declared council regions to 29.
"We don't want any community to miss out," Mr Perrottet said.
"We're erring on the side of 'people are impacted'."
About 700 NSW residents called for help overnight as floodwaters rose and heavy rain lashed the state's Hunter and mid-north coast regions.
State Emergency Service deputy commissioner Damien Johnston told people to be safe around floodwaters even as the rain subsided.
Contaminated water, electrical hazards and unseen underwater debris are all concerns.
"Where the sun is shining, there's still many risks out there," he said.
Resilience NSW boss Shane Fitzsimmons said staff were being deployed to begin helping with recovery efforts.
This comes after his organisation faced heavy criticism for its slow response to victims earlier this year.
"(We're) seeking to do things better, quicker than we have before," Mr Fitzsimmons told Nine.
The emergency services minister said the state could hold its head high in terms of its response this time.
"I know that the work is not finished yet. We are moving into the recovery stage," Ms Cooke said.
Heavy rains may have subsided to the relief of thousands but severe flooding still poses risks in saturated catchments.
Evacuation orders remained in place for parts of Sydney and the Hunter. Floodwaters in some parts of the Hunter reached record levels.
The risk of landslips, trees toppling and flash flooding is still present following persistent heavy rain over several days across multiple regions.
Hazardous surf and marine wind warnings are also still in place for parts of the NSW coast.
Maitland mayor Philip Penfold said thousands remained isolated as floods cut off whole suburbs.
"The people of Maitland are very anxious," he told the ABC on Friday.
"But fingers crossed we've seen the worst of it."
Australian Associated Press
