The $2 billion dollar pulp mill in northern Tasmania is close to dead in the water reports businessman Geoffrey Cousins.
The ANZ Banking Group announced on Thursday it will not be financially backing the Tamar Valley pulp mill.
Tasmanian Premier David Bartlett had previously confirmed the government would withdraw further taxpayer-funded support for the project.
“I met with ANZ senior executives late last year on this matter and they said they were going to look very carefully at all the environmental consideration regarding this proposal,” Cousins told ABC Radio.
“And they have obviously done that and they have knocked it back. That is a terrible blow to Gunns.
“It’s all very well for Gunns to say they’re confident they will get the money from overseas.
“They were confident they were going to get it from ANZ and I think this nearly is dead in the water.”
Gunns is seeking a replacement to lead the syndicate of bankers and insists the project will proceed with pulp production underway by July 2010.