Mediation talks between the Department of Defence and lawyers representing residents seeking compensation for PFAS contamination were continuing on Wednesday night.
Mediation began on Tuesday and was due to conclude on Wednesday afternoon.
Both sides declined to comment about the progress of the talks, which are hoped will deliver compensation for residents in Williamtown, Oakey and Katherine.
Despite that, residents' spokesman Lindsay Clout said he remained hopeful of a positive outcome for affected communities.
"We have said all along all we want is to be compensated for what has been taken from us," he said.
If agreement cannot be reached from mediation the matter will go to a full hearing commencing in April.
Prime Minister Scott Morrison said last week that the government had entered into the mediation process in good faith.
"Previous governments have just kicked that can down the road," he said.
"Our government hasn't, we've stepped up and we're engaged in mediation with those communities now."
The Senate supported a Greens motion on Tuesday that expressed a lack of confidence in the government's handling of the PFAS contamination crisis.
