There's been nothing quite like it in the ancient Forest of Dean since the last time a Conservative government tried to privatise Britain's largest oak forest.

In 1993, the threat to sell off 42 square miles of woodland between the rivers Severn and Wye in Gloucestershire was only repelled after huge protests by locals and ramblers. At the rally today more than 3,000 people, backed by celebrities, bishops, leading conservationists and politicians, pledged to defend "the people's" trees from what they fear will be a corporate land grab.

Today, more than 110,000 people had signed a petition against the coalition's proposed sale of all Forestry Commission land in England. Opposition to the sale of nearly 20% of all England's wooded area is fiercest in Gloucestershire where yellow ribbons and posters have been tied around thousands of trees.

If the public bodies bill, expected to be debated in the House of Lords within three weeks, becomes law, the entire 650,000-acre forestry commission estate in England could be sold to developers, charities and power companies, possibly raising hundreds of millions of pounds.

The government argues it wants more land to be forested and is hoping local communities will buy and manage much of the acreage put up for sale.

But objectors say the selloff is short-sighted and fear that woods will be bought by developers and energy companies who will limit access to trails and seek to fell as many trees as possible for a quick profit.

"It is extraordinary that one of the country's most ancient forests – a place of great beauty that is enjoyed by so many people – is also one of its least protected. The Forest of Dean … should continue to be managed as a whole for the widest public benefit," said the writer Bill Bryson, president of the Campaign to Protect Rural England.

"The green heart of Britain is not for sale," said conservationist David Bellamy.

No one climbed the trees as at the Newbury road protests in the 1990s, but as snow fell on the Forest of Dean objectors marched, sang songs and then ignited a bonfire built to resemble Big Ben to show their opposition to Westminster plans.

"This could be a turning point," said Jonathon Porritt, sustainable development adviser to the previous government.

"People have not woken up yet to the implications of this bill. This could be a turning point as people realise that all this rhetoric about the 'big society' is just another way of describing an ideological-led privatisation campaign."

"The people of the Forest of Dean have a rugged independence and the chances of the individuality of the area disappearing is high," said Christopher Hill, who is bishop of Guildford, but also a local resident.

Other forests or large areas of state-owned land managed by the commission and expected to be sold include the New Forest in Hampshire and Sherwood forest in Nottinghamshire.

More than 30 other crown forests as well as large areas of heathland and bogs currently managed by the Forestry Commission in England are expected to be sold.

"There are no guarantees that income from sales will be used to support forestry," said Hilary Allison, policy director of the Woodland Trust.

"No decisions have been taken on any particular sites. We will not compromise the protection of our most valuable and biodiverse forests", said a spokesman for the Department for the Environment, Food and Rural Affairs (Defra).