Prime Minister Julia Gillard has flown to Hobart to broker a deal to secure the future of the Tasmanian forestry industry.
The deal could be worth hundreds of millions of dollars and is likely to include a compensation package for forestry contractors and sawmillers who have suffered from lay-offs, mill closures and near record-low export volumes.
Ms Gillard will meet with Tasmanian Premier Lara Giddings in Hobart on Saturday. Federal Environment Minister Tony Burke has been in the state since Friday.
The Prime Minister said she wanted to "seize the opportunity" presented by the statement of principles last year by environmentalists, industry bodies and unions.
The statement agrees to the protection of large swathes of the state's forests and paves the way for the creation of a plantation-fed pulp mill.
"I am here today personally to engage in further discussions," Ms Gillard said.
"There's a real opportunity to be seized here and I believe we should seize it.
"I'm looking forward to the discussions to come."
Ms Gillard would not say whether she would stay in the state until a deal had been struck.
Mr Burke was on Friday presented with former prominent trade unionist Bill Kelty's final report on the statement of principles.
The federal government's first offer was rejected by the state earlier this week, apparently because the compensation figure was
too small.
