Claims by the environmental watchdog it had insufficient evidence to prosecute state-owned Forestry Corporation NSW for damaging endangered rainforest have been rejected as "totally preposterous" by the activist who identified hundreds of alleged breaches.

The Environment Protection Authority had two years to investigate and take legal action for the damage in the Cherry Tree State Forest, north-west of Grafton, before a statute of limitations kicked in.

It waited until last week – a fortnight before time ran out – to tell Dailan Pugh, spokesman for the North East Forest Alliance, it could not prove beyond reasonable doubt the corporation had been responsible for harvesting and bulldozing roads through lowland rainforest, an endangered ecological community.

As reported by Fairfax Media in late 2015, Mr Pugh had also alerted authorities to hundreds – if not thousands – of instances of damage to protected trees that provide food and shelter to some of the state's most vulnerable animals such as the yellow-bellied glider and black-striped wallaby.