The government had argued that the area was degraded and had been logged previously, but the committee rejected the application after just 10 minutes' debate, with Portugal's representative describing it as "feeble".

Premier Will Hodgman said yesterday that the government was disappointed but would abide by the umpire's decision.

"Certainly we would not have any intention of going into those areas," Mr Hodgman said.

Tasmanian Liberal Senator Richard Colbeck, who has led the charge to reverse the 2013 extension, yesterday denied that the result was embarrassing.

"I'm not embarrassed at all, in fact I think the embarrassment is that (former environment minister) Tony Burke put up a nomination in 2013 despite the warnings of the then opposition that we shouldn't go ahead with this," Senator Colbeck said in Canberra.

"We've listed areas that shouldn't have been listed."

He did not say how much the application had cost taxpayers and did not rule out applying again to modify the boundary.

Furniture maker George Harris said craftsmen would struggle to survive, with reduced access to specialty species already hurting the industry.

In Doha, Qatar, environmentalists celebrated the decision before turning their attention to the next battle, over the Liberals' forestry legislation to be debated in the upper house this week.

The legislation would make about 400,000 hectares of forests, protected under the forestry peace deal, available for logging in six years.

Environment Tasmania spokesman Phill Pullinger said: "The World Heritage Committee's decision is a great relief for the wild forests of the Great Western Tiers, Weld Valley, Butlers Gorge and Upper Florentine Valley, but much of Tasmania's natural heritage remains at risk, with the Tasmanian government aiming to turn vast areas of protected forest into logging zones."