More than 40 species of fungi have been found in the Chichester State Forest.
Community members joined in a recent National Parks Association of NSW (Hunter Branch) activity to identify fungi in the forest which is described as a biological hotspot of international interest.
President of the National Parks Association of NSW (Hunter Branch) Ian Donovan said the association has made a submission to transfer around 9,500 ha of Chichester State Forest to be incorporated in the adjacent world heritage listed Barrington Tops National Park.
He said the national park extension submission was prepared in consultation with community groups in the Dungog and Gresford area, and had received wide support from the community.
It would have important economic and social benefits for Dungog Shire, he said.
"Improving public access to the southern end of Barrington Tops National Park for appropriate recreational use forms a key part of the proposal to extend the protected area", Mr Donovan said.
"The fungi surveys are part of a program to identify the important biological values of the area proposed for protection as national park.
"Koala surveys undertaken over the last three years in the Upper Paterson and Allyn River forests have shown the presence of this threatened species and important koala habitat that should be protected as national park".
Mr Donovan said fungi are of vital importance to forests and are essential for healthy trees.
"They provide nutrients required for trees to grow, decompose and recycle wood and minerals, and support the diverse plants and animals found in the forest, including koalas.
"The park extension will protect high natural and scenic values and koala habitat, and improve recreational and tourist opportunities.
"Economic analysis undertaken in support of the proposal shows the high tourism and recreational benefits that the proposal can bring to the area.
"Funding under the NSW Government Regional Growth - Environment and Tourism Fund is potentially available to fund national park infrastructure to support tourist visitation in the proposed extension area."
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