With Goulburn councillor Neil Penning looking on from the gallery, councillors at Wednesday's general council meeting said they had been kept in the dark over Goulburn's plans to sell water from the HSP to third parties.

Cr Larry Whipper's motion accusing Goulburn council of "profiteering" and "deceiving" the people of Wingecarribee and Shoalhaven (from where the water initially comes from) was passed.

"All the way this has been a debate about emergency water supply for Goulburn," Cr Whipper said. "We were consistently told this would be for drought relief.

"I vehemently oppose [selling the water to third parties] because it was not what we agreed to.

"I'm flabbergasted that some people have been accusing us of being asleep at the wheel. We have been very vigilant."

Councillors Halstead, Arkwright, Mauger, Stranger and Clark agreed, asking ratepayers to write to the Federal Government with their concerns.

Cr Duncan Gair, however, disagreed, saying he could see no problem with what Goulburn was proposing because "it is not our water and we didn't pay for the pipe".

"I say good on them. Their ratepayers will be thanking them for being proactive and reducing the $75 [water levy] impost."

He and Cr McLaughlin voted against the motion.

Goulburn Mayor Geoff Kettle said on Thursday he would be seeking an urgent meeting with Wingecarribee Council on Monday to solve the issue.

A publicly available document released by Goulburn Mulwaree Council and dated May 2010 stated: "The HSP will provide secure water supply for Goulburn, including during major droughts.

"There is a social benefit to Goulburn as well as a potential economic benefit," the document said.

"Employment generated by the project, both directly and indirectly, will bring significant benefits, particularly as new businesses are attracted to the region due to the opportunity water security offers."

The document raised a few eyebrows in the gallery, with people questioning whether Wingecarribee Council did know or should have known that the HSP was more than just an emergency pipeline.

The council resolved to write to Goulburn Mulwaree, expressing concern that selling water to third party users might affect the "security of supply from Wingecarribee Dam".

It will also seek comment from Goulburn MP Pru Goward, Kiama MP Gareth Ward and Shoalhaven Council.