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NSW deputy Premier John Barilaro said regional NSW was on a knife's edge.
"It's a tinderbox ready to explode," he said.
Mr Barilaro apologised to communities without cases for the lockdown extension but said the reason their region might not have cases could be due to the restrictions.
He said sewerage detection in Tamworth and other towns had indicated COVID could be in areas without cases.
Mr Barilaro said the lockdown extension was designed to protect regional communities.
PREVIOUSLY
Regional NSW will remain in lockdown for at least two more weeks until September 10 at midnight.
The state recorded 1029 new cases of COVID in the 24 hours to 8pm yesterday - a new record high for the state.
Five cases were recorded in hotel quarantine.
Three people died in the 24 hours to 8pm.
NSW Premier Gladys Berejiklian said although areas of the state had no cases the advice was to keep all of regional NSW locked down.
She announced new eased restrictions for vaccinated residents.
From 12.01am September 13 NSW residents who have received both doses of a COVID-19 vaccine will be allowed more freedom.
Ms Berejiklian announced people living outside local government areas of concern could attend outdoor gatherings of five people within 5 kilometres from home.
Those in local government areas of concern can gather outdoors for one hour of recreation within existing rules. This is in addition to the one hour allowed for exercise.
Of the cases 91 were in isolation throughout their infectious period, 94 were infectious while in the community, while the isolation status of 844 is under investigation.
51,232 vaccinations were administered in the 24 hours to 8pm yesterday.
698 people with COVID are in hospital and 116 in ICU.
Victoria has recorded 80 new cases of COVID of which just 39 were in isolation while infectious.
IN OTHER NEWS:
Yesterday NSW Deputy Premier John Barilaro said the government was concerned about the situation in regional NSW and was closely monitor the situation in Shepparton and Canberra.
"The reality is this is about protecting lives and making sure we don't lose control in regional and rural NSW," he said at yesterday's 11am briefing.
"We've also got the threat that's happening in Victoria and regional Victoria on the Albury-Wodonga or NSW Victorian border, and especially places like Shepparton.
"We'll look at all that, we'll take advice from Kerry Chant and her team at the crisis cabinet and we'll make a decision."
Mr Barilaro later told regional media the only way rural NSW would be allowed out of lockdown was if health authorities agreed to reopen council areas with no cases of COVID.
He said Albury had a strong case to reopen under that scheme as there had been no positive wastewater detentions.
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