The state opposition has claimed Forestry Tasmania's decision to waive Ta Ann Tasmania's contractual requirements could cost taxpayers $4 million.
Ta Ann announced a ''holding package'' on Thursday, after earlier threatening to permanently close its two mills if the forests peace deal was not approved by Parliament this year.
The plan includes extending its Christmas shutdown period from three to seven weeks.
The Malaysian-based company's decision to stay was made after state-owned business Forestry Tasmania agreed not to make the company pay for its full contracted wood supply if it didn't need the full amount.
Liberal forestry spokesman Peter Gutwein said he understood that was worth up to $4 million in lost revenue to the embattled Forestry Tasmania.
''It seems unbelievable that while Forestry Tasmania lost nearly $30 million last year and is receiving a taxpayer bailout of the same magnitude, that they are now giving up significant income,'' Mr Gutwein said.
Acting Premier Bryan Green said the state government was committed to supporting Ta Ann and would not make it pay for something it didn't use. Mr Green said it was unclear how much the decision would cost.
The Wilderness Society, Australian Conservation Foundation and Environment Tasmania will contact buyers of Tasmanian wood products to urge them not to make any decisions that could upset the chances of the agreement between them and industry succeeding.
Markets for Change, which has successfully targeted Ta Ann's overseas markets, responded to the veneer processor's decision to stay by calling for a moratorium on logging inside proposed new reserves.
''Ta Ann's extended shutdown and reduction of supply from Forestry Tasmania provide the opportunity to reschedule out of the high conservation value forests immediately - something we believe is also in the interests of Ta Ann if they are to address the concerns of the market,'' Markets for Change chief executive Peg Putt said.