Council has so far rejected the idea of recycling water due to its price tag - an estimated $71m.

However, Western NSW Minister Adam Marshall said he would personally lobby the government to financially assist any councils that chose to investigate recycled water.

Tamworth mayor Col Murray said the funding offer would "certainly make a difference", but it would depend how much the state government was prepared to fork out.

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"That $71 million doesn't include some of the necessary spend," Cr Murray said.

"The final figure could be upwards of $80 million to $100 million.

"In my view, sorting out Dungowan Dam is the immediate step. Following that, is asking what we do about recycled water, because in my humble opinion I think we can do a lot more."

The recently announced dam upgrade isn't expected to be completed until 2024 at the earliest.

During that time, Cr Murray expects a positive shift in the community's sentiment towards recycling wastewater.

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"I think without a doubt the perception will change, that's why it's good to start having the conversation now," he said.

"Particularly for areas like us at the top end of the catchment, it's either going to be recycling water or introducing water from another rainfall area, east of the Great Dividing Range."

Tenterfield Shire Council is considering a recycled water scheme, as the town stares down the barrel of its rapidly approaching water day zero.

Tenterfield council recently held a community meeting about the issue, which drew a mixed response.

Cr Murray said he would closely watch how the Tenterfield debate unfolded.

"It's good to see elected members like Adam Marshall leading and encouraging councils to consider these opportunities," Cr Murray said.

"I think it's something we need to talk to the federal government about what support it can give. Anything that gets off the ground is probably going to have to be three-way funded by state, federal and council."