Australia's second-largest salmon farming company, Huon Aquaculture, has initiated legal proceedings against the Tasmanian Government for failing to protect the environment and the World Heritage-listed area in Macquarie Harbour.

The unprecedented legal actions were filed in the Federal Court and in Tasmania's Supreme Court today.

Huon claims the industry regulator, the Environment Protection Authority (EPA), and the Tasmanian Department of Primary Industries, Parks, Water and Environment (DPIPWE) have failed to manage and protect the environment in Macquarie Harbour, with the Government allowing companies to intensively farm salmon in numbers far greater than the harbour can sustain.

"This is extraordinary and unprecedented, that a public company is actually launching an action against the government for not regulating us appropriately", Huon's CEO Frances Bender has told Four Corners.

"As I understand it, this hasn't happened in Tasmanian Supreme Court history before", she said.

The legal actions follow a Four Corners investigation broadcast in October 2016, which revealed damning evidence about the environmental degradation of Macquarie Harbour, with the Tasmanian Government accused of ignoring the science detailing the destruction of the harbour caused by intensive salmon farming.

Four Corners also revealed the government had repeatedly ignored Huon's pleas to cut back the number of fish being farmed in the harbour.

"Having to actually go to these measures, actually going to court and launching these proceedings to try to get our government to review the way they are managing our industry, imagine how we feel," Ms Bender said.

"It gives me no pleasure at all."

Confidential scientific report obtained by Four Corners

The ABC's Four Corners program has exclusively obtained a confidential scientific study — the draft copy of the January 2017 Environmental Research in Macquarie Harbour report — undertaken by the Institute for Marine and Antarctic Studies (IMAS).

The ABC understands the study was commissioned by the government regulator, the EPA, in late 2016, to report on the current health of the harbour.

The natural ecology of Macquarie Harbour is in danger of collapse. ( ABC News: Sophie Zoellner )

The confidential study reveals conditions in the harbour have dramatically deteriorated, with the amount of dissolved oxygen (DO) in the water plummeting to historic lows.

Without dissolved oxygen, the salmon and the native marine life living in the waterway struggle to breathe and suffocate.

The report also reveals the natural ecology of Macquarie Harbour has been severely impacted by intensive salmon farming.

The endangered maugean skate is also under threat.

Excerpts from the report state:

"DO levels are now extremely low throughout the harbour … All of the independent data sets (industry, EPA, Sense-T, Parks, IMAS and CSIRO) are providing the same picture; DO levels in the bottom waters are now worryingly low.

"DO levels are now extremely low throughout the harbour … All of the independent data sets (industry, EPA, Sense-T, Parks, IMAS and CSIRO) are providing the same picture; DO levels in the bottom waters are now worryingly low. "There has been a significant decline in the total abundance and diversity of benthic infauna at all of the leases.

"There has been a significant decline in the total abundance and diversity of benthic infauna at all of the leases. "At lease 1, the data suggests that the sediments are virtually devoid of all fauna out to at least 500 metres from the cages."

Lease 1 is owned by Australia's largest salmon-farming company, Tassal.

The report also questions the adequacy of the government's monitoring and management of the harbour.

"At present there are still concerns that the compliance monitoring is not supporting management as required — in that it needs to be sufficient to ensure that farming remains sustainable both for the salmon farmers or for the broader environment," the report states.

Huon CEO Frances Bender says she was horrified when she read the IMAS report.

"We knew it was bad from our monitoring but even we were shocked with the findings," she said.

"The government must respond appropriately to the IMAS report. This is their report. This is not my report. It's a peer-reviewed report commissioned by the government and at this point in time they are not taking notice of their own irrefutable science.

"If the government doesn't regulate us appropriately and do the right thing, we have a scenario where our reputation could be irretrievably damaged."

Internal correspondence between EPA and industry revealed

Ms Bender told Four Corners that Huon made a confidential submission to the EPA in January 2017, based on the damning IMAS report, calling for the regulator to lower the amount of salmon that companies are allowed to farm in Macquarie Harbour down to 10,000 tonnes harbour-wide.

"We used to farm at these rates," Ms Bender said.

"All we're asking is that we get back to a level under 10,000 tonnes which gives Mother Nature and the Harbour the opportunity to come back to the state that it was before."

Frances Bender says the Government cannot ignore its own report. ( ABC News: Sophie Zoellner )

But Four Corners has also obtained a series of letters written by the EPA to the heads of all three salmon farming companies in Tasmania, revealing the regulator is planning to proceed with a stocking density of 14,000 tonnes in the harbour.

The letters are dated January 16, 2017, and were written and sent after the regulator had received the highly critical IMAS report.

The letters show Tassal has been awarded the highest stocking density of 25.35 tonnes per hectare.

Tassal's rate is almost three times as much as rival Petuna, which is the largest producer in Macquarie Harbour, accounting for 45 per cent of farmed hectares.

Despite Petuna's size, the EPA has only allowed it to farm at 9.65 tonnes per hectare.

Tassal's rate is also double the amount the EPA is allowing Huon to farm at, with Huon being permitted 12.56 tonnes per hectare.

Letters reveal Tassal has worst environmental record

The letters also reveal the EPA has awarded Tassal the most favourable farming rate despite Tassal having the worst environmental record in Macquarie Harbour.

The letters expose that Tassal was issued with 14 non-compliance notices in September 2016, up from three notices in May 2016.

Over the same period, Petuna have been issued with three non-compliance notices, while Huon has been issued with two.

Tassal's farming lease is also located closest the World Heritage area.

"It's very concerning to see that there's one company that's been awarded a significantly higher stocking rate than the two other companies," Ms Bender told Four Corners.

She is now calling for the government to explain how it has come to these figures.

"That's the question, and that's the reason we've actually launched this action today.

"We don't know. If the government can explain to us transparently and to the community how they're coming to these numbers and they're basing them on the science, that the science they've commissioned, and it makes sense to us, then we'll be happy.

"But at this point in time we cannot understand how they've come to these levels."