Judge finds Morrison government erred in approving preliminary work on tailings dam in the Tarkine

In a judgment late on Monday, Moshinsky said a decision in January by an environment department official representing Ley had not considered whether the works would cause serious or irreversible damage to the habitat of the endangered Tasmanian masked owl.

The justice did not make any immediate orders, but flagged the approval was likely to be set aside. That could mean the proposal by minerals company MMG would need a new assessment under national environment laws.

The Bob Brown Foundation said the judgment was one of the most significant in environmental law since the Environment Protection and Biodiversity Conservation Act was introduced in 1999, as it showed the precautionary principle must be employed when the effects of a proposed development were unclear.

Neither MMG nor the Tasmanian government, which is a strong supporter of the development, had responded to Guardian Australia before publication.

The validity of the federal approval of the drilling and roadworks was already under question after Ley agreed before the election that there were grounds for it to be formally reconsidered. Responsibility for that process was handed to the new environment minister, Tanya Plibersek, after Labor won the election. She is yet to make a decision.

He said the commonwealth should compensate nearly 100 protesters who had been arrested while campaigning against the development.

The Bob Brown Foundation says crossing the river would place the tailings dam inside the Tarkine, an environmentally diverse area that the Australian Heritage Council 10 years ago recommended should be protected. It says there are other options open to MMG.

The justice reserved his orders until a hearing expected later this week.