The pilot left Canberra for Moruya with 70 litres of fuel on board which he reported was evenly distributed in the two wing tanks. He flew to Moruya with the left tank selected and reported that the flight took 40-45 minutes. After a brief stop at Moruya he taxiied for the return trip. Pretakeoff checks were completed while taxying, one of the final checks being selection of the right wing tank for the return trip. The taxi route involved back-tracking along the main north/south runway. As there were two other aircraft inbound, one of which was already in the circuit for runway 18, the pilot expedited his taxying and decided to take off using approximately 1000 metres of the 1523 metre runway. He made a left turn on the runway and immediately applied take-off power. Shortly after the aircraft became airborne the engine stopped. The pilot established the aircraft in a glide and landed it in the water in the Moruya River. The cause of the engine failure was not determined.