The decree has alarmed environmental groups concerned about Indonesia's rapid deforestation.

The country had the fastest pace of deforestation in the world between 2000-2005, according to Greenpeace, with an area of forest equivalent to 300 soccer pitches destroyed every hour.

Krystof Obidzinski, a researcher with the Centre for International Forestry Research (CIFOR), said historically mining had never been a significant contributor to deforestation.

"Definitely there's a danger and it's regrettable but on the overall schemes of things, as far as deforestation per se, we think it's not a major concern," he told a panel discussion on deforestation with foreign correspondents.

The decree applies to 13 mining firms that four years ago were allowed to resume operations in forest areas -- including Freeport McMoRan Copper & Gold, which operates the massive Grasberg mine in Indonesia's remote Papua province.

Obidzinski said the new regulation was driven by a need to reinvigorate mining sector investment, a key tax contributor, as well as the need of the forestry ministry to recoup income lost due to a decline in other forest activities.

Bowo Satmoko, a senior official of the forestry ministry, said so far only three mining companies had been given the go ahead to exploit forest areas.

"The others are still proposing exploration," he said.

He said that mining permits were confined only to the 13 firms, although an official at the energy and mines ministry told Reuters last week that companies which had mining permits before a forestry law was issued in 1999 could also be eligible.

Another forestry ministry official, Syaiful Anwar, said the bar would be set high for companies operating in forests.

"For companies to be able to operate there's a procedure and it is a tough procedure," he told reporters.

A leading domestic environmental group, Walhi, has collected donations from hundreds of people to buy up more than 3 million square metres (32 million sq ft) of protected forest to prevent mining companies being allowed to operate there.

Indonesia's forestry law issued in 1999 prohibited open-pit mining in protected forest areas. But in 2004, the country's fourth president, Megawati Sukarnoputri, issued a decree to allow the companies to resume operations in protected areas.