Environment Minister Sussan Ley says her department does not believe the Lake Malbena development will not have a significant impact on natural heritage values or threatened species.
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The minister last month decided to have the project assessed under the Environment Protection and Biodiversity Conservation Act as a controlled action.
In a departmental decision brief, she recommended the development not be considered a controlled action because it would be taken in a particular manner.
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This is in line with the department's 2018 determination on the project.
A Federal Court decision last year set aside the government's original approval.
Ms Ley in the brief noted development proponent Daniel Hackett in April had provided the department with a Wilderness Quality Assessment prepared by the Tasmanian Parks and Wildlife Services.
She said the department considered the number and complexity of impacts from the development were "low and locally confined".
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