Independent tests commissioned by the Sydney Morning Herald reported on Tuesday found the highest ever recorded levels of the cancer-causing "forever chemicals" in Adams Creek, feeding into Medlow Dam, and Greaves Creek - beneath the dam.
Water NSW shut off a pipeline connecting Medlow Dam and Greaves Creek Dam on August 28, after government tests found 0.09 microgram per litre of PFAS, slightly above Australian guidelines of 0.07.
But Herald testing from early September shows PFAS concentrations at 3.7 micrograms per litre in Adams Creek and 14 micrograms per litre in foamy water in Greaves Creek.
Water NSW said drinking water levels remain safe across the Blue Mountains region.
"The Australian Drinking Water Guidelines only apply to water that has been treated for human consumption," a spokesperson told AAP.
"They do not apply to raw, untreated water – such as that sampled by the Herald ... all water provided for human consumption remains safe."
The spokesperson said testing foam is also less reliable.
"It is well-recognised that foam is likely to provide inflated results on overall concentration levels," they said.
Water NSW shut off a pipe connecting Medlow Dam and Greaves Creek Dam from drinking water supplies. (Jennifer Ennion/AAP PHOTOS)
Water NSW said it was conducting its own rigorous testing.
PFAS compounds encompass more than 14,000 chemicals that do not break down and can accumulate toxins in plants and animals, earning them the nickname "forever chemicals".
As studies on the compounds emerge, overseas governments in New Zealand and the US have taken action to gradually ban or phase out their use.
Increasing concern about the chemicals has triggered a federal inquiry into their impact on the environment, economy and people's health.
Almost everyone will have some exposure to the chemicals in their lifetime and it is believed all humans have some level of the compounds in their blood.
There is limited evidence about the impact of the synthetic substances on human health but studies have found links between PFAS and some cancers, reduced kidney function, lower birth weight in babies, increased cholesterol and other symptoms.
The US tightened its standards in April, saying doing so would save tens of thousands of lives over decades.
18°C