However, what and who determines "substantial work" - which must be done by August 31 under the permits - is unclear.

Authority director Alex Schaap said yesterday that he was unaware "of any process by which the pulp mill permit can be extended in the event that it would otherwise lapse".

When asked who defined and decided whether the criterion of "substantial works" had been met by Gunns, Mr Schaap said that would be dealt with if and when the matter arose.

"It has not been necessary yet for the purposes of administration of the EMPCA (Environmental Management and Pollution Control Act) to determine whether the pulp mill project has substantially commenced and no definition of substantial commencement has been developed for that purpose," he said.

"If such a determination does become necessary then it will be made in accordance with legal advice relevant to the circumstances that pertain at that time."

Mr Schaap said it was inappropriate for him to speculate on how such a determination would be made, but said it was possible that would be done by any of the planning authorities or regulators involved with the major project.

These include the West Tamar, Launceston City and George Town councils; the Justice Department; the Infrastructure, Energy and Resources Department; the Health and Human Services Department; and the Primary Industries, Parks, Water and Environment Department.

On Thursday, Gunns managing director Greg L'Estrange accused the state government of misleading it over a commercial settlement and criticised continuing delays.

Premier Lara Giddings said yesterday that a commercial settlement would only be offered after the probity process by Wise, Lord and Ferguson had finished - as was announced on Thursday.

"The appropriate course of action is to reach a commercial settlement with the company," she said.