The economic analysis, conducted by economic consultant Naomi Edwards and researcher Jamie Hanson, asserts the promised funding combined with the protection of forests would lead to more tourism and gourmet food and wine business opportunities.

``The very best way for Tasmania to move up the economic food chain or value chain is for our regions to grow very strong niche centres of excellence, particularly in manufacturing,'' Ms Edwards said.

Under the intergovernmental forest agreement, the bulk of the $120 million to be paid over 10 to 15 years is contingent on legislation to protect up to 572,000 hectares of high conservation value forests being passed by the Tasmanian Parliament.

Greens leader Bob Brown said the analysis found the fund had the potential to pump double that into the state's economy.

``I commissioned this report to show Tasmanians the sorts of ideas that could be implemented to create an environment that will help small businesses flourish, with protection of the forests at the heart of reforms,'' Mr Brown said.

Economic Development Minister David O'Byrne said the first projects to be funded under the first $16 million instalment would be announced in the next few months.

The forest industry immediately dismissed the report as a ``zero sum game''.

Forest Industries Association of Tasmania chief executive Terry Edwards said it was not necessary to destroy the forestry sector to strengthen ecotourism, agriculture and viticulture. ``FIAT does not believe Tasmania has the luxury of deciding that it can do without the jobs associated with forestry and mining,'' Mr Edwards said.

Liberals forestry spokesman Peter Gutwein described the report as an economic fairytale.

``To suggest that our $1.4 billion forest industry can be replaced by a few walking tracks and niche cottage industries is sheer fantasy,'' Mr Gutwein said.