The proposed Pulp Mill is currently the center of debates and discussions once again after the resignation of Gunn's chairman was announced on Thursday.

John Gay became the chairman of the company for 37 years and was fully credited for the proposed $2 billion Tamar Valley pulp mill.

In an interview with ABC Local radio, former Premier Paul Lennon said that Mr. Gay's determination to push for the pulp mill was due to the current industry crisis and the decline of international wood chip markets.

"A mill must be built in Tasmania. If it's not, then the forest industry will wither on the vine," Mr. Lennon said.

Bob Brown, Australian Greens leader, stressed the need for the mill project to push through.

“The pulp as conceived by John Gay is dead in the water with its chlorine with its destruction of native forests and wildlife and pollution but it doesn't say that it's off the drawing board," he said.

Senator Brown believes that the departure of Mr. Gay will open the way for an alternative pulp mill proposals.

Mr. Gay's resignation coincides with the formation of a new anti-mill group.

Judith King, spokesperson for the Friends of the Tamar Valley said that Mr. Gay's departure is a clear signal to the government that the mill proposal should be shelved.

She said her group will work with others to halt future constructions of the mill.