The committee, chaired by Labor Senator Lin Thorp, handed down the report in Federal Parliament yesterday.

Senator Thorp told Parliament the government's reasons for removing the area were ``short-sighted, if not blatantly untrue''.

The federal government had requested the World Heritage committee remove areas extended last year, labelling them as clear-felled, logged and degraded.

But the report said only a small area could be described as ``degraded'', and removing the areas could damage Australia's international reputation.

Senator Thorp said the move would ``do more damage to the forest industry than the government could possibly imagine''.

``Customers would not buy wood that comes from such a bitter legacy,'' she said.

Two Liberal senators dissented from the recommendations made by the Labor and Greens-dominated committee, saying the government would stick to its forestry election commitments in Tasmania.

Wilderness Society spokesman Vica Bayley said the report proved the areas were worthy of heritage status.

``The government must drop its irresponsible request to axe the new Tasmanian World Heritage forests before it makes Australia an international laughing stock,'' Mr Bayley said.

Tasmanian Greens Senator Christine Milne said the inquiry received almost 10,000 letters opposing the reduction of the area.

``The industry doesn't want to cut these forests, no market wants to buy the wood, and the community wants to see them protected,'' she said.

Tasmanian Liberal Senator Richard Colbeck told Parliament that the extension by then environment minister Tony Burke was a ``political process''.

``The World Heritage Commission visited Tasmania in 2008 and found that additional areas did not need to be included and that forestry activities outside the then boundaries were not diminishing the World Heritage values,'' Senator Colbeck said.