The NSW government is offering a $7.5 million incentive that it hopes will persuade recalcitrant councils to fluoridate their drinking water.
But Health Minister Jillian Skinner says the government won't be supporting a Labor bill that would give state authorities power to force local councils to put the tooth-strengthening chemical in their drinking water.
Last week, Lismore Council overturned a ban on fluoride after seven years of lobbying by local health professionals.
However, there are still 15 council areas across the state that don't fluoridate their water, the government says.
Ms Skinner says the funds are aimed at encouraging those councils to reverse their decision.
The government wanted to support councils in making their own decisions, rather than take a big stick approach.
"It is for this reason we are boosting our infrastructure support for councils who have avoided fluoridation, to encourage them to deliver this vital service to the community," Ms Skinner said.
Councils can currently choose not to add the dental health booster to their water supplies, with several recent attempts by councils to block fluoridation.
A bill introduced into NSW parliament this month by opposition health spokesman Andrew McDonald would give the government power to mandate fluoridation in council public water supplies.
Ms Skinner on Wednesday said the government wouldn't support the proposed legislation.
"Recent outcomes have shown that with education and information, local councils are able to make informed decisions about fluoridation," she said in a statement.
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Why are they so desperate to put fluoride in the drinking water?
