The state's endangered animal emblem and others will be extinct unless the Victorian government protects ash forests in the Central Highlands.
But a decrease in logging in the politically and environmentally sensitive forests will see at least 250 jobs in Gippsland go, with fears for thousands more jobs in the supply chain.
Both issues are arguments being made to the Andrews government over the future of ash forests and the state's timber industry.
In January, Australian Sustainable Hardwoods, which processes timber from the Central Highlands, warned it would have to close its Heyfield plant, costing 250 direct jobs, because the offers of timber supply from state-owned VicForests was not enough to keep the plant open.
For years, environmentalists have argued there was over-logging in the Central Highlands, threatening the long-term viability of the timber industry and the ecosystem.
VicForests has now acknowledged that the resource is declining by only offering Australian Sustainable Hardwoods 200,000 cubic metres over the next three years.
In 2014, a plan had been negotiated for a 20-year contract supplying the company with 155,000 cubic metres of timber a year, but the Napthine government did not sign off on it, nor did Labor when it won in 2014.
The deal also had an indemnity clause that would pay out millions of dollars it had invested if supply was lost.
The mill, owned by the Hermal group, has now proposed that the government makes a $40 million taxpayer-funded investment for the mill to re-tool as part of long-term plan to transition to plantation timber.
But under that proposal the mill still needs at least five years of guaranteed supply of 150,000 cubic metres of timber per year.
The company and some Coalition MPs believe that there is enough supply in the forests to keep the mill afloat. The government has asked VicForests to double check how much supply is available.
The trees processed at Heyfield come from the Central Highlands where the endangered Leadbeater's possum lives, and the mountain ash is also listed as a critically-endangered species.
Experts warn that if the government does increase supply to the industry it will doom the Leadbeater's possum. A healthy forest is also critical to strong water catchments and security.
Professor David Lindenmayer, from The Australian National University, has been working and studying forests for decades, including time with the Victorian government in the early 1990s. Even then, he said officials knew that the ash forests were being over-cut.
"Given what has already been logged, and burnt, almost all of the remaining ash forest is going to need be protected to ensure this animal survives," he said.
"This is playing out as a text-book collapse of the forest."
The Leadbeater's possum is not the only animal at risk, with several gliders including the koala-like greater glider in dangerous decline.
People like Professor Lindenmayer have been critical of government decision making for some time, particularly the failure of officials to factor in the 72 hectares of ash forests damaged in Black Saturday to long-term resource yields.
"This really is grotesque mismanagement of a public resource," he said.
"Even the Victorian government arm of industry is acknowledging that it can't cut the forest at anything like the current rate."
Premier Daniel Andrews said he would not comment on commercial negotiations.
"I'm very much alive to the issues at hand, the jobs that are at risk, and the profitability, the sustainability of that business and industry," he said.
"We are actively involved in this process, and I understand and I value those jobs and this industry."