The $13 billion plan to restore Australia's biggest and most complex river system to sustainable levels following years of drought has lost the input of a First Nations organisation critical to its delivery.

The Murray-Darling Basin Plan, first launched in 2012, has tread water since its introduction, with its national plan setting a target of 2750 gigalitres of water to be recovered per year over a long-term average annual yield, along with 450GL for critical environment outcomes.

Last month the independent authority overseeing the scheme, the Murray-Darling Basin Authority (MDBA), admitted it would not reach legislated targets by the June 2024 deadline.

An Indigenous group established to advise on management of the Murray-Darling river system was also recently shut down.

The Northern Basin Aboriginal Nations organisation (NBAN) has received $1 million since being established to provide strategic advice on First Nations' water rights to the MDBA, a requirement under the basin plan, but it has since lost its contract.

"The decision to finalise the MDBA's contractual arrangements with NBAN was carefully considered, but ultimately taken as the MDBA no longer had confidence in NBAN's capacity to ­address organisational challenges and to rectify outstanding deliverables," the MDBA said.

The NBAM had failed to undertake progress or financial reporting ­requirements as contractually required and did not hold enough community events in the basin region, the MDBA said.

The NBAN had worked with 16 First Nations groups to collect more than 10,000 environmental watering objectives at 111 sites across the northern Basin.

Water and Environment Minister Tanya Plibersek only last week warned the $13 billion scheme to restore the river system must be extended over a "more reasonable time period" after the MBBA warned it would not be completed on time.

The Northern Basin Aboriginal Nations organisation was first granted federal funding in 2018, with concerns about its obligations raised in November 2021.

Ms Plibersek said the former Coalition government "comprehensively failed to deliver every aspect of the Murray-Darling Basin Plan".

"The Liberals and Nationals are complaining about a contract which was entered into," Ms Plibersek said.

"If they thought there was something wrong with it, why didn't they do anything?

"They got multiple warnings the plan was late and off track. They promised $40m for First Nations water in the basin but never delivered a cent."

MDBA chief executive Andrew McConville said he was confident the organisation could still manage the river system despite the NBAN's closure.

"The MDBA is committed to listening to First Nations' voices and we continue to explore with First Nations peoples and groups across the basin our approach to engaging with them," he said.

The NBAN, which was contacted for comment, states on its website it was established as "a not-for-profit company and peak body that represents, advocates for and empowers First Nations in water management in the northern Murray-Darling Basin"

"Since 2009, through the cultural authority of its member nations, NBAN has been providing strategic advice on First Nations water rights and interests and delivering and partnering on projects at a state and federal level," according to the website.

Environment Victoria earlier this month blamed successive Victorian governments for the delay to the scheme and said the environment had suffered as a result.

Its Debasing the Basin Plan report, released this month, claimed Victoria was the state most to blame for "sabotaging" the national scheme.