The council will write to the state government to inform it that negotiations over the Voluntary Planning Agreement have broken down and request independent mediation.

Council will also write to the Independent Planning Commission, requesting it defer the determination of the project until the issue is resolved.

Whitehaven Coal's offer of $3.2 million, or just $160,000 for each year the mine operates, was well short of the council's requested $14.87 million.

In 2017, the company originally offered just over $3 million. When that was rejected, it lowered the offer to $2.7 million in April this year.

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"Council maintains all offers made so far do not meet the community objectives for a planning agreement concerning the Vickery Mine Extension project," Narrabri mayor Cathy Redding said in a statement.

"It is not a fair and reasonable offer considering the impacts of the mine on the Boggabri community, so accepting the current VPA offer is not in the Public Interest."

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In October, Narrabri councillor Ron Campey said Whitehaven's offer was "arrogant, offensive and shows contempt to the people of Boggabri".

"If Google is correct, [Whitehaven CEO] Paul Flynn's wages per year are in excess of the total VPA offered," Cr Campey said.

"I find it disappointing that we have to even deal with this rubbish that they are offering us."

At the time, a Whitehaven spokesperson said the company "certainly considers the offer to be generous by industry standards".