A government official in Queensland has been given the boot for not acting earlier on issues regarding contaminated water brought about by coal gasification tests done underground in South Burnett.

Cougar Energy has been directed to stop its coal gasification tests at Kingaroy as residents in the area are advised not to use the water until test results have been confirmed.

Cougar Energy detected the presence of carcinogenic agents, toluene and benzene, while monitoring excavations a few months ago, but failed to notify authorities until the end of last month.

The government of Queensland pledged to make a full investigation on the contaminated water concerns of the South Burnett coal gasification project.

The energy firm cannot resume its operations until further tests have been conducted and results are released.

Quensland authorities say that low degrees of toluene and benzene are not immediately dangerous to health, however, nearby residents are advised not to take in any of the water.

Stephen Robertson, Minister of Energy, says other excavations in the area will also be examined.

"What I want to do is assure landholders and the community more generally that we will leave no stone unturned in terms of investigating the discovery of these chemicals in the water supply," he announced.

John Bradley, director general of DERM says Cougar Energy delayed in reporting the results of the test.

The nearby residents were not notified until last night and Mr. Bradley says one of the department's officers have been sacked due to failing to act sooner.

"They were looking at levels that were below Australian drinking water guidelines and I think they have taken that into account," the director general said.

"Nevertheless our commitment is to make sure that we've transparency in relation to any exceedence or detection in relation to these kinds of chemical compounds.

"We have stood the officer aside."

DERM also asked Carbon and Linc Energy to conduct similar environmental tests in their Chinchilla and Dalby operations.

Andrew Dash, spokeman for Carbon, says they will comply with the request.

"It certainly won't change our operation," Mr. Dash said.