Mr Barnett wrote to the Bob Brown Foundation on September 24 about his decision to grant MMG a mining lease on Helilog Rd, near where it wants to develop a contentious tailings storage facility to allow the mine to keep operating beyond 2024.

"Following due consideration, I was not empowered to make the decision," Mr Barnett wrote.

"In consequence, there has been no valid grant of that lease."

MMG said it had found a minor technical error with its mining lease application over Helilog Rd.

The company said it had re-submitted an application and continued to work with relevant government departments through the approvals process.

"Our paused works at South Marionoak are allowing us to review every aspect of regulation and permitting for the assessment of a new tailings storage facility," it said.

The foundation - which opposes the proposed tailings storage at South Marionoak and MMG's nominated alternative, citing environmental reasons - said Mr Barnett had made an embarrassing backdown "after the Bob Brown Foundation exposed the lease as illegal".

"If Mr Barnett will not resign, then the Premier should sack him," takayna/Tarkine campaigner Scott Jordan said.

Mr Barnett said: "The radical Bob Brown Foundation's continued and relentless attempts to muckrake and misinform the community about mining in our state have continued today."

"MMG recently made application for a mining lease over an existing access track to their South Marionoak site under the Mineral Resources Development Act 1995.

"`The application was assessed by Mineral Resources Tasmania, which recommended it be approved, a recommendation I subsequently accepted.

"`A lodging error in the application was then found; MMG were advised and submitted a new application.

"`This has occurred, with the new lease application currently being assessed by MRT in accordance with the act.

"I have expressed my disappointment regarding the oversight to the secretary and requested that a comprehensive review of the tenement application and assessment process take place as a result.

"This is already under way.

"It's also important to note that I'm further advised that the act allows for mining lease applications to be made to allow for access purposes and that this is not uncommon practice."

The foundation said MMG sought the lease over Helilog Rd in April.

"The area followed a narrow strip along 5 kilometres of Helilog Rd and included beekeeping sites, the Forest Walk tourist site, the site of the Bob Brown Foundation's protest camp from December 2020 and access to MMG's proposed heavy metals tailings dam," it said.

"To be eligible for a mine lease under Tasmanian law, an applicant must demonstrate a mineable body of ore and a mining plan.

"The BBF asserted that neither existed in this case and that the lease was sought to deny public access to the 5 kilometres of Helilog Rd leading to MMG's project site."

Mr Jordan said: "This was an attempt to shut down public protest and to lock the community out of an area that MMG and the Minister did not want them seeing and, without our intervention, this illegal lease would have done just that."

Shadow Resources Minister Shane Broad said Mr Barnett had failed to support industry time and time again.

"In recent weeks, we have seen Minster Barnett fail to back his previous wood supply guarantees, backflip on his "no more forest lockups" promises, adopt the Greens' salmon policy and today it has been revealed that he acted beyond his ministerial powers," Dr Broad said.

"Tasmania's resource sector is vital to the state's economy and needs a minister that is up to the job, not one that is incompetent."

Tasmanian Greens Leader Cassy O'Connor said the Greens thought it was time for Mr Barnett to resign.

She said there were still protesters going through the courts because they were arrested at Helilog Rd because of the unlawful lease.

It is understood the company had no plans for mining or mineral exploration in the Helilog Rd application area and the application was intended to improve access to South Marionoak.

The tailings project is subject to full assessment under the Environment Protection and Biodiversity Conservation Act, following a decision earlier this year by federal Environment Minister Sussan Ley.