ENVIRONMENTALISTS have lost the battle to save the habitat of the endangered Leadbeater's possum in the central highlands of Victoria.

In the Supreme Court yesterday Justice Robert Osborn refused to grant permanent orders that would restrain loggers from harvesting timber in three coupes, Gun Barrel, Freddo and South Col, northeast of Toolangi.

But Justice Osborn also called for an urgent review of the reserve system that is supposed to protect the Leadbeater's possum's habitat within the central highlands forest management area.

"The 2009 bushfires have materially changed the circumstances in which the existing system was planned," Justice Osborn said.

The judge ruled the Leadbeater's possum action statement made under the Flora and Fauna Guarantee Act did not stipulate the creation of exclusion zones to protect the possum independently of the forest management plan for the area.

"MyEnvironment has not established that the very limited logging now proposed within Gun Barrel by way of variable retention harvesting constitutes a threat of serious irreversible damage to the environment," the judge said.

Originally published as Greenies lose logging battle for possums