Mr Garrett said he had given careful and thorough consideration to Gunns’ request for an extension of time.

The company has lodged 16 modules that form the EIMP but so far only four have been approved.

“Along with my department and the Independent Experts Group, which advises me on the EIMP for the proposed mill, I’ve been concerned that with just four modules currently approved and a further 12 yet to come before me, Gunns would not have the EIMP satisfactorily completed by October 4.

“Gunns were advised of this last month and subsequently sought an extension to the assessment period to provide them with an opportunity to satisfy the stringent environmental requirements for the mill.

“The EIMP requires thorough and rigorous examination and an extension will enable Gunns to address the issues raised by my department to date and will also give my department, the IEG and me an opportunity to ensure that every finalised module fully addresses all of the relevant environmental matters set out in the 48 approval conditions for the proposed mill.”

Condition seven of the previous government’s approval for the mill says that an extension of time can be granted by the Minister for the purpose of completing particular elements of the EIMP.

“I take my responsibility to exercise my powers and obligations under the EPBC Act very seriously. It is not unusual for major projects to need additional time to ensure that all environmental matters are fully investigated and properly addressed.

``The comprehensive assessment of every aspect of the Gunns EIMP by both my department and the IEG must not be rushed.

“Gunns must now ensure it finalises the remaining modules in time so they can receive the same diligent evaluation by the IEG and me as the four modules already approved.”

Gunns told the ASX last month that it was still seeking finance for the project and could not give an assurance that it would go ahead.

The company raised $336 million in a capital raising share issue last week and is currently seeking $91 million from retail shareholders to reduce corporate debt.

It said it would not be asking its shareholders to finance the pulp milll and is actively seeking an overseas partner to take a 50 per cent stake in the project.