A number of Australian bass larvae on a fish farm hatched with severe deformities, with most bearing two heads.

A neighbouring macadamia nut farm is being examined as part of an investigation by the Queensland Department of Primary Industries and Fisheries.

It is suspected that chemicals used on the farm, while approved for use in Australia, may have caused the deformities but thus far there is no conclusive evidence connecting the farm to the two-headed fish.

Farm chemicals such as endosulfan, which is banned in other parts of the world, is still used in Australia and has been previously linked to fish kills.

According to a DPI&F spokesman, investigation into reports of fish deaths at the Sunshine Coast hatchery have been on-going for several years.

The DPI&F says the initial investigation was discontinued because no breaches of chemical use could be identified, and there was a lack of evidence to support further actions.

However, the investigation was reopened late last year when new complaints about fish health were reported.

The DPI&F says a fish pathologist and an aquaculture officer promptly visited the fish hatchery in December to undertake a thorough assessment of fish health.

Samples of the pond water at the hatchery came back negative for chemical residues.

The DPI&F says a biosecurity inspector also visited the adjoining macadamia farm and examined its records and its spraying techniques.

To date, test results have shown no evidence that chemicals used on the macadamia property have been used contrary to the label instructions, and they have also excluded the presence of infectious diseases.

Samples from dead fish collected by the owner are awaiting final testing and results should be available by February.