"Kevin Rudd's $100 million plan is a mixed bag for Tasmania," Greens Leader Senator Christine Milne said.
"There is no way federal dollars should be propping up Ta Ann. Tasmania's brand of clean, green and clever needs to be boosted, not undermined.
"Tasmania needs new industries that build on our environment and our global reputation.
"Tasmanians have been waiting for the hundred million dollars from the intergovernmental agreement to boost regional jobs and new industries. But this money was always contingent upon protection of the forests.
"Prime Minister Rudd needs to make very clear what is new money, what is out of the promised hundred million, and why he is not maintaining the pressure on the Tasmanian Legislative Council to deliver on forest protection.
"Is Prime Minister Rudd abandoning hard fought agreements in order to breathe new life into the logging industry and to pretend that PM Gillard's IGA didn't exist."
Tasmanian Senator Peter Whish-Wilson said Kevin Rudd didn't mention anything about Tasmania's iconic, high conservation forests whose conservation status still hangs in the balance.
"The Prime Minister must answer, will the money flow without Tassie forests being protected?" Senator Whish-Wilson said.
"Let us not forget this process started with a push for forest conservation which led to a historic peace deal, but today's diversification funding is meaningless without forest protection and an end to conflict in Tasmania.
"It's also disappointing that communities and businesses who have worked hard to secure diversification funding are now hanging by a thread.
"They have a right to be upset and anxious that a few legislative councillors, cheered on by the Liberal Party, have done everything they can to undermine this deal for forest protection and its diversification funding.
"The Greens support investments in long term infrastructure and services that enable communities and business, such as the collaborative "Catalyst Project" listed for funding, but we don't support funding to prop-up unprofitable companies and failed business models like Ta Ann.
"There is no future in business-as-usual for Tasmania."