It has opted for a five-year wind-down of logging, coupled with the establishment of national and regional parks that cover much of the contested area.

But getting the necessary legislation through Parliament is expected to be difficult, with the Coalition, Shooters and Greens parties all indicating opposition.

The state government said it would protect 107,000 hectares of Riverina redgums and set up an $80 million support package with logging to be wound down over the next five years.

Mr Rees proposed locking up the 42,000 hectares of the Millewa forest Riverina redgums in a national park, along with further unspecified areas along the Murray, Murrumbidgee and Lachlan rivers.

Environmental groups slammed the government for ''chopping the promised area in half''. The Greens want a total ban on logging while the Shooters are opposed to any halt to logging.

''This is clearly a deal with the Greens to win their preferences at next year's election,'' the Shooters MLC Robert Brown said of the government's proposal. ''We'll vote against it, as will the Nationals and Liberals, I suspect.''

The Greens MLC Ian Cohen said: ''Don't be surprised if I oppose it. It's a Labor-Nationals stitch-up. I am seriously unimpressed, and will be seeking advice. It's a pathetic compromise that leaves half of the magnificent Millewa Forest open for logging.''

The opposition also slammed the decision, saying that ''on face value, we'll be opposing'' the legislation because the government has ignored the local communities.

''The only reason that the redgums in the Barmah-Millewa area are in a reasonable condition is because they have been actively managed by the forestry industry for the past 150 years," the opposition spokeswoman on natural resources, Katrina Hodgkinson, said.