Independent MP Rob Oakeshott is demanding an end to the 110-well coal seam gas project conditionally approved at Gloucester in his mid-north coast electorate, after both federal and state governments moved to stop CSG in western Sydney electorates that will be crucial to the federal election outcome.

NSW Premier Barry O'Farrell has announced a two-kilometre buffer around CSG mines, ending AGL's proposed $100 million Camden North project in western Sydney, after escalating pressure from the federal Coalition and his own backbench.

But according to Mr Oakeshott ''if it's good enough for western Sydney, it should be good enough for Gloucester''.

''It looks like my electorate is becoming the fall guy in the bad ad hoc politics of an election year, where both parties are running scared of the politics of western Sydney,'' he said.

AGL recently postponed its western Sydney expansion due to community concerns and Environment Minister Tony Burke also expressed grave concerns about CSG wells under people's houses. At the same time, Mr Burke gave conditional federal approval to Gloucester.

''If a two-kilometre zone is good enough for one place it should be good enough for the other,'' Mr Oakeshott said.

Premier O'Farrell has said he can't wind the clock back on approved coal seam gas leases but he can protect families in residential areas from new tenements.

Mr Oakeshott said NSW's decision should not stop Mr Burke from expanding federal powers by introducing water as a new trigger for federal involvement under the Environment Protection and Biodiversity Conservation Act.

The federal government is waiting to see the details of NSW's new regulations and approval processes.

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