The Friends of the Earth environmental group which made the claims, also alleges a deal was made between HVP and the DSE prior to the government agreeing to buy back the environmentally significant `cores and links' area.

The group claims DSE, a State Government department, wants to "take control in order to log the area itself" and HVP is continuing to log an area which is off-limits.

The allegations have been denied by HVP Gippsland Plantations general manager Owen Trumper, who said the company had met and would continue to meet the terms set out in a Heads of Agreement (HoA).

Both HVP and the State Government said they were keen to reach a resolution on the buyback.

In October 2006, the State Government carried out an Australian first when it entered into a $7 million deal to buy back privately owned forest to protect the `cores and links', 8482 hectares of HVP owned forest in the Strzeleckis.

Under a HoA signed in October 2006, HVP was allowed to undertake a one-off harvest of 1500 hectares to allow it to meet contractual agreements with Australian Paper Maryvale before leaving the area to be regenerated and permanently preserved.

The HoA was signed by the government, HVP and community and environmental signatories, not including Friends of the Earth. The HoA is not the final agreement but sets a framework for the future.

The buyback is official Labor Party policy.

But Friends of the Earth claims to have proof that HVP and DSE are trying to "stonewall" the buyback. The group has accused the two parties of having an alleged private deal "cooked up" prior to the signing of the HoA.

Friends of the Earth land use researcher Anthony Amis said the treatment of the community by the two organisations had been "absolutely disgraceful".

"Almost every effort to negotiate a win for the conservation of the region has been thwarted and undermined by the DSE, who are opposing Labor policy that Trust for Nature manage the area as reserve," Mr Amis said.

Mr Amis claimed his group learned about DSE's "true agenda", to take over the area itself, six months after the HoA signing.

"We are opposed to DSE having any control (of the cores and links)... we do not want them burning in the area," he said.

"We know the agenda of the DSE early on was to supply local sawmills with saw logs and DSE was basically running with that agenda when the minister was requesting the land be put into reserve.

"Before that, we thought they were working towards what the minister wanted, we had no idea they were going to stonewall it months later."

Mr Amis said the community had kept an eye on what was happening in the reserve because the DSE, which he claimed should be monitoring HVP's use of the area, was "asleep at the wheel".

Mr Amis said HVP was also in breach of the HoA conditions. He accused the company of demanding more than 50 per cent more timber for the one-off harvest than it originally agreed to.

"HVP has taken full advantage of stalling tactics," he said.

Friends of the Earth also alleged that HVP wanted to call off the buyback if the deal was not finalised by this month.

Mr Amis said HVP and DSE had put Victorian Environment Minister Gavin Jennings in a difficult position.

In a written statement to The Express, Mr Trumper said HVP was working towards a solution to satisfy all parties.

"Although we had no legal obligation to engage in negotiations regarding cores and links, we did so in the interest of working with the community and interested stakeholders and in accordance with our stewardship policy," he said.

"As interested as we have been in achieving the greatest possible conservation outcome for the cores and links, from the start we have been unequivocal that any agreement must allow us to meet our contractual obligations to Australian Paper.

"First, this was a legal obligation, and second, we feel a strong obligation to the broader Gippsland community and the 6000 people who depend, directly or indirectly, on the forest products industry for their livelihood.