The Federal Court this month ruled environmental protection laws are powerless to stop illegal logging in Victoria.

Environmental groups took to the state's Central Highlands last week to renew calls for an end to logging in native forests.

Warwick Jones reports.

This is Toolangi State Forest, where Victoria's publicly owned logging company, VicForests, is harvesting native trees for paper pulp.

Despite public outcry and nearly a dozen court cases, the state government has refused to stop logging native forests like this one.

So, I'm on my way to meet Steve Meacher from Friends of the Leadbeater's Possum, which is the organisation that brought action against VicForests for illegal logging activity that was destroying the habitat of Leadbeater's Possum, which is an endangered species.

Steve Meacher:
"The decision to go to court in the first place was not taken lightly. Given that we were seeing logging trucks rumbling through our communities, day after day, week after week, carrying habitat off the mountains, we decided that going to court was basically the last resort."

In May last year, the Federal Court agreed that VicForests had broken the law while logging in Victoria's Central Highlands, including Toolangi.

But in May this year, that decision was overturned on a technicality, despite the fact the court found VicForests had still breached state law.

Steve Meacher:
"So logging is not being conducted legally in our forests, it's clearly being conducted unlawfully, but the Federal Court could do nothing about those breaches under state law."

The court found that logging is exempt from the federal law designed to protect endangered species, like the Leadbeater's Possum and the Greater Glider.

Karena Goldfinch:
"Whatever Greater Gliders were living up in these trees would now starve. Because when you cut down a tree and just leave it standing there, there's no food for it, there's nothing. So it takes about a week for them to just perish."

Prof. Brendan Wintle:
"We are in an extinction crisis. We're seeing declines in forest-dependent species all across the nation."

Since 2000, the population of Greater Gliders in the Central Highlands has decreased by 80%.

And the critically endangered Leadbeater's Possum by half.

Coupled with the effects of climate change and more frequent bushfires, logging native forests could devastate Victoria's biodiversity.

Prof. Brendan Wintle:
"It's harder for us to mitigate the impacts of climate change and to stop massive wildfires. But we can manage timber harvesting. We don't have to log native forests."