The prospect of an extended lockdown in Sydney loomed on Monday as Australian health officials reported yet another record daily rise in COVID-19 cases for the year, fuelled by the highly infectious Delta variant.

New South Wales state reported 112 new locally transmitted COVID-19 cases, almost all of them in Sydney, despite the country's biggest city entering its third week of lockdown. Case numbers have been at record levels for at least three days.

There was, however, a glimmer of light as the number of newly-infected people who were out in the community while infectious dropped to 34 from 45 on Sunday.

State Premier Gladys Berejiklian said the progress of that figure in coming days would determine whether Sydney's lockdown, due to end on Friday, would be extended.

"That's the number we need to get as close to zero as possible," Berejiklian said during her daily televised briefing. "It is really up to us. The health expert advice will be based on what those numbers look like. I can't be clearer than that."

Berejiklian said a majority of Monday's cases were family members or close friends of already infected persons, andpleaded with residents to comply with lockdown rules, which were tightened over the weekend.

Schools in Sydney, home to a fifth of Australia's 25 million population, are closed, public gatherings are limited to two people and residents may only leave home for essential business, including work and grocery shopping.

Australia has previously successfully suppressed COVID-19 flare-ups through snap lockdowns, speedy contact tracing and tough social distancing rules. With a total of around 31,200 cases and 911 deaths since the pandemic began, the country has fared better than many other developed economies.

However, the Delta variant fuelled Sydney outbreak has spiralled quickly. Total infections are nearing 700 since the first was detected in mid-June. Sixty-three people are in hospital, with 18 in intensive care, officials said, while a woman in her 90s became the first COVID-19 fatality for the country this year.

Vaccine criticisms

The Sydney outbreak has put Australia's sluggish vaccine rollout under the microscope. Only around 11% of Australia's adult population of just over 20.5 million have been fully vaccinated.

Critics have pointed to confusing public advice as well as vaccine shortages.

Official federal health guidance recommends the locally-produced AstraZeneca vaccine be restricted to people aged over 60 because of blood clot concerns, while the imported Pfizer  vaccine is currently limited to people aged 40 to 60 due to supply constraints.

However, New South Wales officials on Monday said the state's vaccination centres and pharmacies would be authorised to give the AstraZeneca vaccine to anyone over 40. The federal government, meanwhile, has said anyone under 40 who wants to receive the AstraZeneca vaccine can do so following consultation with their doctor.

Lieutenant General John Frewen, head of the COVID-19 vaccination taskforce, on Monday defended a newly-released advertisement showing a youthful-looking intubated woman in a hospital bed struggling to breathe and urging people to get vaccinated.

"The conditions in Sydney right now we felt warranted that commercial," Frewen said. "It is absolutely confronting and we didn't use it lightly."

The federal government doubled its order for Pfizer shots in April to 40 million, enough for four-fifths of the population. It has so far received around 4.4 million doses, the Sydney Morning Herald newspaper reported. From next week, it will receive weekly shipments of around one million doses.

Australia has also ordered 10 million doses of the Moderna vaccine, with the first million due to be delivered in September.