Their cypress mills are to close in the wake of yesterday's move to lock up 350,000 hectares of woodland across the central west and north-west – plunging the two communities into a spiral of job losses.

Premier Bob Carr championed the decision as a win for conservation – but Nationals MP Ian Slack-Smith said the impact on Bingara could turn it into a ghost town.

About 40 jobs are to go after the mills at Bingara and Narrabri, and a hardwood mill at Baradine, opted to accept the government compensation package included in the deal.

Mr Slack-Smith, the Member for Barwon, said the Premier's announcement would devastate those communities, and the impact of the mill closure in Bingara would be equivalent to 20,000 job losses in Sydney.

"These communities have been dependent on the timber industry for five generations, and to lock up the woodlands will sound the death knell," he said.

Opposition spokesman for Forestry Duncan Gay said the mill closures would have "significant flow-on effects".

"As families have less to spend and others leave the region, everything from small businesses to school children numbers will suffer."

The Government would compensate the mills that closed and workers would be offered jobs at nearby mills or given a one-off redundancy payment of $72,000 each.

Seven other mills have been offered new 20-year contracts - at Gunnedah, Dubbo, Baradine [owned by Gunnedah Timbers], Quirindi, Gulargambone and Gwabegar.

Mr Carr said they would continue to operate at around their current timber allocations but would be secured with contracts that would guarantee total timber supplies of 57,000 cubic metres per annum.

The Brigalow Belt bioregion conservation area has been a long-running concern for landholders and timber millers in an area stretching north-east from Dubbo through Narrabri to the Queensland border.

But Gunnedah Timbers principal Paddy Paul, who was in Sydney yesterday to meet with ministers Tony Kelly, Bob Debus, Ian Macdonald and Craig Knowles, said he doubted the long-term viability of his family's business after the announcement.

Even though his mills were among those to win a reprieve, he was concerned about the sustainability of sufficient sources of quality timber.

"We were very disappointed at the briefing," he said. "There wasn't a map available of the areas to be set aside and not all of the information was tabled.

"The Government has completely disregarded the Brigalow Region United Stakeholder option and bowed to the greens. It is a very poor state of affairs," he said.

Mr Paul said he would meet with the Infrastructure, Planning and Natural Resources Minister Ian Macdonald next Monday to further discuss the proposal.

Mr Carr said five years of detailed analysis had been invested in the decision and he regarded it as a fair and balanced outcome.

He said the decision would also guarantee a secure future for local farming interests, coal, gas and bee-keeping industries.

Gulargambone sawmill operator Tim Lacey told The Leader it was too early to pass comment on the proposal as little information was available on which forests would be locked away.

But he said it was the mill's intention to remain in the industry and not close down.

"It is good that the Government has finally made a decision but there is a lot more detail to be looked at before we can make a comment," Mr Lacey said. The Gulargambone mill is one of the largest employers in the town with about 25 staff.

Conservationists from an alliance focused on protecting the forests in the Brigalow region welcomed the decision, describing it as a substantial conservation achievement.

However some expressed disappointment about the designation of the Goonoo forest for mining exploration.