The Federal Government's nuclear agency has admitted there is no scientific reason why Australia's radioactive waste could not continue to be stored in Sydney.

The Australian Nuclear Science and Technology Organisation (ANSTO) has told the Senate's environment committee that the only reasons a remote site for a national radioactive waste dump is being sought in the Northern Territory are political.

The committee is reviewing Commonwealth legislation which overrides the Northern Territory's power to stop a dump being built in the Territory.

During the 2007 federal election campaign Labor promised to scrap the legislation, but has not moved to do it.

ANSTO's Stephen McIntosh told the committee it is safe to continue storing radioactive waste at Sydney's ageing Lucas Heights nuclear reactor and only current legislation stops it taking more waste.

"In the last couple of years there were some small amendments to that which widens the scope of that slightly," Mr McIntosh said.

He said a new shed would have to be built at Lucas Heights to house more waste.

Bradley Smith from the Federation of Scientific and Technological Societies told Labor Senator Louise Pratt that a site must be chosen quickly because spent nuclear fuel is soon due to return to Australia from France.

"We need a national facility or a Commonwealth facility and that means hard decisions have to be made," Mr Smith said.