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An environment group has accused VicForests of illegally logging rainforest in East Gippsland.
The Goongerah Environment Centre alleged the state-owned timber company had logged about one hectare of rainforest on the Errindura Plateau.
The group's spokesman, Ed Hill, said according to the Flora and Fauna Guarantee Act, any rainforest areas bigger than 0.1 of a hectare must be protected.
He said loggers had bulldozed ancient rainforest canopy species that were hundreds of years old.
"We're calling on the State Government to immediately remove the contractors from the area and stop logging operations, as logging operations are ongoing they're continuing to threaten the rainforest that's already been illegally logged in the area," he said.
"It's certainly looking like it's a lot bigger than 0.4 of a hectare, which is the minimum size that rainforest has to be in order for VicForests to not log it and give it a 40 metre buffer."
Environment Minister Lisa Neville said the department was notified of the allegations on Wednesday night and was looking into the matter.
VicForests said it was also investigating the claims but said the coupe was not assessed as containing rainforest.
A spokesman for VicForests, Nathan Trushell, said logging would continue next week.
"We have a rock-solid process here around how we investigate these matters," he said.
"We've been speaking to our regulator. Our preliminary review is that no it hasn't but we will be carrying out our own detailed investigation as will the Department of Environment, Land, Water and Planning."