The policy would reverse the 2005 changes to the Defamation Act that prevent a company with more than 10 employees from suing for defamation of the company name.

It would also see protesters who engage in illegal action on work sites given a $10,000 on-the-spot fine for the first offence, spend three months in jail on the second offence, and remove the discretion for magistrates to decide whether to record a conviction.

Opposition forestry spokesman Peter Gutwein said reversing the defamation law reforms would ``restore the balance'' and ``return to business the rights to sue groups that disseminate false and misleading information''.

However, Law Society of Tasmania president Anthony Mihal warned the proposed changes to defamation law were unjustified and could have ``a chilling effect on free speech''.

Mr Mihal said the changes were introduced to prevent companies tying up their detractors in expensive legal proceedings, such as the infamous Gunns 20 case. 

He said laws already existed to protect companies from the malicious spread of damaging misinformation.

``One of the policy reasons behind the uniform defamation laws exclusion of certain corporations was the existence of the injurious falsehood cause of action, and the concern that corporations could use defamation actions as a means of silencing legitimate protest against corporate conduct,'' Mr Mihal said.

The Law Society also does not support mandatory sentences.

Opposition Leader Will Hodgman said the proposed laws still allowed lawful protest and would not stop things like a union-organised stop-work action.

``We certainly support the right for people to protest, the right to free speech, but we cannot support the continued invasion of work places, forests, the damage to work equipment and the damage being done to the Tasmanian economy,'' Mr Hodgman said.

Huon Valley Environment Centre spokeswoman Jenny Webber said the tough penalties would not deter protesters, many of whom had already been penalised by the court.

Environmentalist Bob Brown said the proposal would undo any positive publicity Tasmania had received in recent years, and accused Mr Hodgman of dusting off 30-year-old policy.

``I spent 19 days in Risdon Prison for protesting illegally, as they put it, although no charges were ever kept, against Robin Gray's laws,'' Dr Brown said.

``They will have zero deterrence as far as I am concerned.''

Dr Brown said a legal challenge to the proposed laws was ``inevitable''.