In Victoria, another 80,000ha of national parks will be created which will have grazing and logging bans.

The move to reduce the scale of commercial logging and cattle grazing in Victoria's red gum forests has been applauded by environmental groups.

And Wilderness Society spokesman Gavin McFadzean challenged NSW, which also boasts significant strands of red gum forest, to match Victoria's action.

But it's sparked anger among farming and timber groups.

Supporter of cattle grazing in the red gum country, Max Rheese, said the bans would increase fire risk along the river.

"Cattle grazing is a fuel-mitigation measure," he said.

"By shutting the graziers out, you increase the fuel load … the grasses in the Barmah are already chest high."

The comments were echoed by Victorian Farmers Federation spokesman Simon Ramsay.

National Party leader Peter Ryan said the burden of creating the new parks would be carried by towns along the Murray in the form of job losses.

"This will do nothing to preserve the river red gums - what they need is rain," he said.

The conservation expansion is the result of a 2006 election promise and to reports suggesting the majority of red gums are either dead or dying.

In a long-awaited response to the Victorian Environmental Assessment Council's investigation, the Brumby Government has proposed new national parks for the Barmah Forest near Echuca, parts of the Gunbower Forest near Cohuna and sites on the Lower Goulburn River near Shepparton and the Warby-Ovens region near Wangaratta.

The move means up to 160,000 hectares of red gum forest are now protected in reserves, prompting the Wilderness Society to label it the most significant environmental gesture of Mr Brumby's 17-month premiership.

Victorian Association of Forest Industries chief executive Philip Dalidakis estimated that up to 75pc of red gum areas currently available to commercial logging would become off-limits, meaning many jobs would be lost.