The NSW planning minister insists the government's new koala conservation measures don't water down protections for the iconic marsupial, while the Greens argue they "set koalas up for extinction".
The state government on Monday announced new environmental planning regulations for koala habitats, ending a stoush that threatened to rip apart the Liberal-National coalition.
Six months ago National leader John Barilaro warned his party would stop supporting government legislation over the issue, saying his MPs would sit on the crossbench.
Planning Minister Rob Stokes said the new compromise policy meant rural land zoned for farming or forestry, or "core rural zones", would be exempt from the Koala State Environmental Planning Policy (SEPP) 2021.
It will instead be subject to the old regulations, SEPP 44, until new codes on private forestry and local land services can be established, likely by April.
The government argued the new SEPP would enhance koala protection in areas such as Greater Sydney, the Blue Mountains and the Central Coast, where more than 95 per cent of development occurs.
Stronger protections would also be created in the Tweed and Byron shires.
But the NSW Greens argue the regulatory changes "set koalas up for extinction" and are a victory for the logging industry.
Mr Stokes insisted in budget estimates on Tuesday the government had not capitulated to the Nationals, saying SEPP 44 had not been loosened and remained in force in core rural zones.
And while those zones may not be immediately subject to SEPP 2021, Mr Stokes said imminent forestry and land service code changes would at a minimum maintain existing levels of protection.
He also admitted the issue was "vexed", saying the SEPP 2021 was the natural product of compromise between "very diverse views".
The government aims to double the NSW koala population by 2050.
"I genuinely think this is a step forward," Mr Stokes said.
"It's just one lever, there are many other things that need to be done as well."
However, Nature Conservation Council chief executive Chris Gambian said excising farming and forestry zones from the koala SEPP was "a catastrophic setback".
Logging and land-clearing on forestry and agricultural land accounted for 90 per cent of koala habitat destruction, he said.
NSW Greens MP Cate Faehrmann said the policy favoured logging over koalas, and criticised the government's plan to strip councils of their ability to rezone land used for primary production.
Federal Greens counterpart Sarah Hanson-Young said the Nationals were like "foxes in charge of the hen house" and would facilitate more bulldozing and logging of koala habitat.
Mr Barilaro said the deal struck the right balance and would prevent farmers being "strangled by red tape".
However, NSW Farmers President James Jackson said farmers were not adequately consulted and implored the government to "ensure the new regulations won't negatively impact farm businesses".
The Koala SEPP 2020 came into effect a year ago and sought to simplify the process by which koala habitats were recognised and protected, extending the number of protected tree species from 10 to 65.
But the Nationals were concerned the policy would restrict farmers' land clearing, as more trees would be classed as koala habitat.
Operations ultimately reverted to the former SEPP 44.
A NSW parliamentary inquiry found in July that koalas would lose their habitat and become extinct in NSW before 2050 without urgent intervention.
The government in January committed to only 11 of the 42 recommendations made by the inquiry and supported 17 of the recommendations in principle.
Australian Associated Press