The government says the bill will improve forest management and revive the forest-wood chain.

The state owns around a fifth of all forests in Slovenia and the management of the state-owned woods has been based on a licence system adopted in 1996.

A majority of the licences, which have been awarded without public calls for a period of 20 years, run out at the end of this June.

In line with the bill adopted in a 47-23 vote, rather than awarding concessions for forest management, the government will establish a specialised corporation, named Slovenian State Forests, which will be fully state controlled.

While the company's main task will be to manage and dispose of state-owned forests and acquire new forest area, it would also manage centres for collection or processing of wood and create conditions for the development of the forest-wood chain.

One of the goals of the bill is to make forest management more profitable, create green jobs, increase the area of state-owned forests in the long run and increase transparency in awarding contracts for forest work and sale of wood.

It is envisaged that the supervisory board of the emerging company would have eight members, with the government having four representatives, workers three representatives and the opposition one representative.

The bill has caused some friction in the coalition, as parties could not agree whether the government or the Slovenian Sovereign Holding should have final say in the company.

The latter solution had been advocated by the ruling Modern Centre Party (SMC), but was rejected by the remaining two coalition parties with help from the opposition members of the relevant committee.

The company, which is planned to become operational on 1 July, will be established with a capital injection and a non-capital contribution from the state.

It will be able to take loans with state guarantees approved by the National Assembly. This has prompted concern from the centre-right opposition New Slovenia (NSi) and Democrats (SDS), which believe it could represent illegal state aid.

Iva Dimic of the NSi also warned that the emerging company had no business plan. "We are playing with taxpayer money," she said, while Tomaž Lisec of the SDS added that neither a strategy was known nor "who the company's bosses will be."

The changes are meanwhile supported by numerous experts and representatives of the wood industry. Damjan Oražem, director of the national Forest Service, has assessed that the bill contains all the elements for good forest management.