THE rare orange-bellied parrot, behind the scuttling of a $220 million Gippsland wind farm, is the subject of a $3.2 million Federal grant to protect its habitat.

Federal Environnment Minister Ian Campbell sparked a political controversy in May when he stopped the Bald Hills development because the wind farm rotors could kill one parrot a year.

The Victorian Government says the latest grant shows the minister was wrong to stop the project.

The bird is one of the rarest in the world with only about 50 breeding pairs remaining.

It survives on the margins of the Bass Strait, which it crosses twice a year between its Tasmanian breeding areas and winter habitats on the mainland in Victoria and South Australia.

The money will go toward working with landholders in the parrot's mainland winter bases, and conserve breeding and nesting habitats in the Tasmanian world heritage area in the state's south-west, Environment Minister Ian Campbell said today.

More effort would also go in to improving migratory habitats, controlling predators in north-west Tasmania and on King Island, and for conservation work on defence land in Port Phillip Bay.

The latest initiative would build on $1 million already spent since 1989 to conserve the parrot and habitats vital to its successful migration and breeding, the minister said.

"The orange-bellied parrot faces a number of major threats, including habitat loss and modification, predators, mortality caused by collision with structures and catastrophes such as storms,” Mr Campbell said.

But the Victorian Government said the grant showed the minister was wrong to knock back the wind farm project.

“Senator Campbell has finally read his own report which suggests the best way to protect the orange-bellied parrot is to preserve its habitat,” the state’s Planning Minister Rob Hulls said.

“Anyone could have told him months ago that blocking a $220 million wind farm investment in Victoria was not the way to ensure the survival of the orange-bellied parrot.

“Modelling by Senator Campbell’s own consultants suggested the risk to the parrot would potentially amount to about one dead bird every 1000 years.

“Now, after a Federal Court order that his decision on Bald Hills be set aside and remitted for reconsideration according to law, Senator Campbell is desperately trying to unscramble the egg on his face.

“He used his position as a Federal minister to knock back the wind farm for purely political reasons and he was caught out.

“The best way to help endangered bird species such as the orange-bellied parrot is to deal with climate change – the biggest threat to these birds.

“If the Federal Government was serious about addressing global warming then it would join the Bracks Government in supporting renewable energy sources such as wind farms.

“I call on Senator Campbell to reverse his decision on Bald Hills Wind Farm.”