The Federal Environment Minister has pledged a further $102 million in State and Federal funding to implement the forest peace deal.
The state is providing about 40 per cent of the money, an extra $39.5 million, with $62.5 million from the Commonwealth.
The Minister, Tony Burke, says the money will be used to compensate forest workers affected by the industry restructure and help fund payments for the owners of country sawmills to leave the native timber industry.
But it does not include compensation for veneer producer Ta Ann for reductions in its wood supply contracts.
The Commonwealth will cover that cost after negotiations.
Mr Burke says the extra funding will be withdrawn if the enacting legislation is not passed before the end of the year.
The announcement came shortly before the Upper House introduced the legislation to halve the native timber industry and protect an extra 500,000 hectares of forest from logging.
The Commonwealth has already promised $276 million to implement the deal, negotiated by industry and green groups.
About half has already been spent.
MLCs received a briefing from the Minister before the announcement.
The Upper House asked for the extra funding details before it debates the bill.
Mr Burke says the extra $102 million is enough to make the peace deal hold.
"It's a level of assistance that we have not been willing to give the forestry industry in any other part of the country and with it you can very easily see a path for investment, see a path for employment," the Minister said.
State Liberal leader Will Hodgman describes the extra funding as a shameful sell-out.
"We are seriously undervaluing our forestry industry if the best we can do is sell the industry out and jobs with it for $100 million," he said.
"This is less than half of what Mark Latham, who was a disaster for Labor, offered back in 2004." Phill Pullinger from Environment Tasmania says the extra money to help manage new reserves is significant.
"There's been an increase there for an extra $2 million per annum so there's a good funding package there for the new reserves arising from the agreement and it's certainly a big level of support if you look in an Australian context," he said.
"it's not usual that a Commonwealth Government actually chips in and funds the management of national parks and reserves." The Tasmanian Forest Industries Association's Terry Edwards says it is marginally less than what the industry had asked for.
"As always in these things it would be nice to be offered money that was much closer to the value of the forests that's being removed from production, but we're realists in this process and we believe it should be sufficient to see the agreement implemented effectively." Debate begins After two hours of debate on the forest peace deal bill last night, three Legislative Councillors had declared their voting intentions.
Labor's Craig Farrell opened proceedings by declaring his support for the bill.
The Independent for the northern seat of Rosevears, Kerry Finch, followed suit.
"I have no plan B and I'm therefore inclined to support the agreement," he said.
But Liberal MLC Vanessa Goodwin expressed anger and despair at the pressure being placed on the Upper House to reach a decision.
"This bill represents the worst piece of public policy to come before this Council.
Terry Edwards says it is too early to predict an outcome.
"I don't think the numbers are clear cut." Debate will resume at 9am.