Under the new restrictions, more than four million Sydneysiders will be limited to watering their gardens just twice a week from July 1, with tough fines for those caught wasting the increasingly scarce resource.

The New South Wales state government quadrupled the penalty for anyone caught stealing water, by diverting it from fire hydrants or using illegal plumbing, to a 2,200 dollar (1,660 US) on-the-spot fine, rising to 50,000 dollars if the offence is proved in court.

Exemptions previously granted to businesses such as used car saleyards were also rescinded.

"If necessary, we will step up enforcement," state Utilities Minister Frank Sartor told reporters. "We have 50 patrol cars and even local councils can enforce (the restrictions)."

Water restrictions were first introduced in Sydney in October 2003 and have been gradually tightened as the drought continues. Sartor said even stricter rules could be introduced if dam levels fell below 30 percent.

Australia's federal government on Monday increased its drought aid package for stricken farmers by 250 million dollars to 1.25 billion dollars.

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