Tamworth, Glen Innes and Tenterfield were identified as at risk of running out of water in a draft report issued by the Department of Primary Industries six years ago, according to a green group.
The Assuring Future Urban Water Security report, completed in December 2013, shows the state government knew climate change would reduce "secure yield" for those towns by as much as 29 per cent by 2030.
NSW Nature Conservation Council policy and research coordinator Jack Gough said towns like Guyra and Tamworth were now suffering exactly the sort of crisis that the draft report predicted.
"It was an alarm bell for the government," he said.
"The government knew that climate change was going to have an impact on secure (water) yields for towns and did nothing, and in fact they did worse than nothing."
He said the reason was simple: an ideological belief that climate change wasn't real.
"This is the National Party's climate change denialism having a direct human cost.
"They had advice provided to them that climate change is going to reduce water availability to towns, especially because we're going to get more droughts in some of these areas."
The Murray Darling Basin area, which includes the New England, is currently suffering its worst ever drought, and towns like Guyra, Tenterfield and even Tamworth are running out of water. Walgett, identified as another at risk LGA, has had no water for months.
The 2013 draft report provided advice that towns ought to store enough water for a 1000 year drought, and be able to ride out a 120 year drought with just moderate restrictions. In recommending a more conservative attitude to storage the report also said existing supply in a number of identified towns would not able to achieve that given the likely impact of climate change.
A spokesperson for the department of planning, industry and environment said all local councils and water utility providers in regional NSW had adopted the guidelines in the draft report into their future strategic planning.
"The secure yield modelling that guided the report also helps inform the NSW State Infrastructure Strategy process in guiding the water needs of infrastructure investment throughout regional NSW," the spokesperson said.
"The NSW Government is investing in infrastructure projects to support water security via its $1 billion Safe and Secure Water Program. This ensures regional NSW communities have access to high quality, reliable and affordable water that meets modern environmental and health standards."
Armidale mayor Simon Murray said when Malpas Dam dropped below 60 per cent in Christmas 2014 it should have been a wakeup call.
"You'd hope something would have been done," he said.
"You'd hope that people would have realised that the consequences of a serious drought, they'd already been warned on it, you'd hope they would have taken some action on it.
"Nothing was done from then to now even to try and look at conserving water, whether it be from getting people to conserve water at home, or looking at management structures like raising the wall at that time."
One town that did was Glen Innes, which used state government money and council investment to develop an off-stream water storage called the Eerindii ponds, and the town was able to ward off level 2 water restrictions until July.
Minister and local MP Adam Marshall said he'd never even heard of the report in an interview in Glen Innes on Friday.
He said the Glen Innes Severn Council was considering converting a further quarry to further increase capacity and vowed to help them apply for grants to fund the works.
But ultimately he said providing water was up to councils.
"They're the local water utility. Under the law the council is responsible for providing water supply to its community."