And environmental reports from the proponent, Tamar Lake Inc, also concede that all communities and organisms that rely on saltwater will die, that a eutrophic lake could form, and the "mass dieback and decomposition" will be "unsightly and will smell".

But the president of Tamar Lake Inc, Robin Frith, believes it will be up to the community to decide if it will "tolerate" a pulse of pollution moving downstream for the ultimate long-term establishment of a freshwater lake, which would kill rice grass infestations and shift sediment to the lower reaches, rather than around Launceston.

The Tamar Estuary and Esk Rivers program released a study into sedimentation management options in June, including an analysis of the lake proposal, which in theory involves a barrage at Rowella to allow water levels to be controlled - mostly at one metre below high tide - and sediment to pass through.

The multi-agency TEER report - including reviews by the EPA, TasWater, Hydro, universities and local councils - raised concerns about groundwater issues for Invermay and Inveresk caused by keeping the water level higher.

"The water table is already very close to the surface in Inveresk and Invermay with areas in these suburbs below high tide levels," the report reads.

"Over time, a constant higher water level is likely to result in a higher water table and groundwater will be expressed at the surface in low-lying sections of Invermay, potentially rendering homes unliveable and commercial properties unviable.

"It is likely that a higher water table would further reduce the extremely low bearing capacity of the soils in Inveresk and Invermay and similar areas adjoining the estuary."

The report also raised concerns about how the lake proposal would gain environmental approvals, how its upfront - about $320 million - and ongoing costs would be funded, and where an estimated 200,000-cubic-metres of dredge spoil needed to construct the barrage would be dewatered.

But the biggest concerns centred on ecological values of the Tamar and the impact of a mass dieback event, including when rice grass and saltmarsh - a federally-listed threatened ecological community - dies and releases nutrients.

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"Species of plants in the intertidal zone that depend on a saline tidal environment such as rice grass and saltmarsh will die off, leading to a large pulse of nutrients into the system and potentially leaching of nutrients and other pollutants such as heavy metals currently bound in intertidal sediments and vegetation into the water column," the TEER report reads.

"Even with tidal flushing, the Yacht Basin is a relatively low energy area of the estuary under low flow conditions.

"Removal of tidal flushing from this zone would increase the risk of monosulfidic black ooze forming in this area which would then be disturbed during high flow events down the Cataract Gorge releasing a range of pollutants and odours."

While the report agreed that the lake would have "improved navigability" for recreational users, it would cause a reduction in marine fish stocks which would impact on recreational and commercial fishers through the loss of estuarine habitat and poor lake water quality. It would also make the Petuna fish farm at Rowella unviable.

TEER questioned whether flows for environmental release would be enough to flush the lake, with examples of decreased flows drying prolonged dry periods that could exacerbate other ecological issues.

The Tamar Lake proposal was not included in the Tamar Estuary Management Taskforce's proposed vision for the estuary at Launceston, which instead focused on establishing wetlands and boardwalks.

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Addressing the rice grass infestation was also outside of its scope, with no long-term solutions discussed or considered.

Mr Frith said this was a major flaw with the government studies, and he questioned a range of its findings.

Tamar Lake Inc had commissioned environmental studies - some of which reached similar conclusions to TEER - and cost-benefit analyses in its attempt to lobby the government to consider the project.

Mr Frith said fish ladders would allow migratory species to navigate their way around the barrage, that the lake would reduce flood risk for Launceston, that sediment would be able to flow in suspension through the barrage - claiming it would not settle in the area - and that the death of the rice grass was a benefit of the lake proposal.

"The removal of the rice grass infestations and restoration of the natural environment pre-rice grass is an environmental improvement," he said.

"In the environmental impact report process, the community will have to decide whether they will tolerate a short term pulse of pollution moving one way downstream for the longer term improvement of the amenity, aesthetic presentation and natural environment of the middle reaches.

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"It is a little bit like tolerating roadworks for a better long term solution."

Mr Frith said the barrage would be "controlled automatically" with sensors detecting high and low points of control, thus reducing ongoing operational costs. Tamar Lake, along with the Tamar Action Group, questioned whether the TEER report was truly independent, and that only an independent authority could adequately assess the lake proposal.

TAG chair Andrew Lovitt said their main concerns - addressing the mud, rice grass and flood risk - were still not addressed.