Attorney-General Elise Archer is seeking to intervene in the appeal against the Central Highlands Council's decision to reject a luxury tourism development at Lake Malbena.
The proposed camp on Halls Island, located in the Walls of Jerusalem National Park, was voted down six Councillors to three at a heated meeting in Bothwell in late February.
Under the Crown Proceedings Act section 16, the Attorney-General has the power to intervene in civil proceedings.
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At a directions hearing for the appeal on Friday, the planning tribunal heard the Attorney-General wished to raise a legal question about the jurisdiction of the tribunal to hear the appeal.
Resource Management and Planning Appeal Tribunal chairwoman Marica Duvnjak directed the Attorney-General's lawyer, Paul Turner, to submit facts and contentions associated with the jurisdiction issue by the end of May.
The matter will be then be heard at the appeal hearing set to be held from June 24 to 28.
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Ms Duvnjak also directed lawyer for the Central Highlands Council, Adam Beeson, to provide the appellant's attorney, Shaun McElwaine, more detailed particulars regarding the council's grounds of refusal for the application within 10 days.
Environment Defenders Office chief executive Nicole Sommer, who is representing the Tasmania Wilderness Society, the Tasmanian National Parks Association and two individuals in this matter, said she was pleased the matter of jurisdiction raised by the intervention would be heard at the scheduled hearing.
"We are happy about that because it's going through the independent assessment process," Ms Sommer said.
"The jurisdictional issue has been raised in a way that is not usual process and now that is has been raised it's a matter for the tribunal to determine."
Tasmania Wilderness Society acting campaign manager Tom Allen said the intervention by the Attorney-General subverted due process.
"On the one hand, we have the state government seeking to join with the proponent, while at the same time undermining that very same process the government is seeking to join," Mr Allen said.
"We are not content with the state government gifting a World Heritage, publicly-owned island to a private, commercial, tourism developer."
Premier Will Hodgman said the Attorney-General was party to the proceedings because the government disagreed with the council's decision.
"As the landowner, we have an interest in the decision and it's important that the government be represented in this process," Mr Hodgman said.
"We do commit to good process."