Indonesia has extended a logging ban to protect rainforests despite fierce industry pressure, the government said Wednesday, but green campaigners slammed the move as inadequate.

Vast tracts of the sprawling Indonesian archipelago are covered in trees, including some of the world's most biodiverse tropical rainforest that is home to endangered animals such as orangutans, tigers and elephants.

But huge swathes have been chopped down by palm oil, mining and timber companies in Southeast Asia's top economy, which has become the world's third-biggest carbon emitter as a result.

Under a $1 billion conservation deal with Norway, President Susilo Bambang Yudhoyono two years ago signed the moratorium, which bans new logging permits for primary, or virgin, forest -- defined as forest not logged in recent history.

On Wednesday the government confirmed Yudhoyono had signed a two-year extension and the moratorium would remain in its original form.

"The extension on the moratorium of new permits will be in place for two years from when the presidential instruction is issued," said a statement from the cabinet secretariat.

Yudhoyono signed the extension on Monday, it said.

The ban applies to new permits for primary forest and peatland with the exception of projects already approved by the forestry minister and others considered vital, such as for power production, it said.

But Greenpeace criticised the government for not taking the opportunity to strengthen the ban.

"That is what's really needed if we want to save Indonesia's remaining tigers and orangutans, which are under threat from relentless palm oil and pulp and paper expansion," said the group's forests campaigner Yuyun Indradi.

Indonesia, the world's top producer of palm oil that is used in many everyday items from soap to biscuits, has faced fierce industry pressure over the ban.

"The moratorium has already had negative effects on the economy, not just in the palm oil industry but the timber industry as well," said Fadhil Hasan, from the Indonesian Palm Oil Association.

The government says the moratorium has drastically reduced logging in a country with the world's third largest amount of tropical forest.

Senior forestry ministry official Hadi Daryanto said that between 2000 and 2010, Indonesia lost around 1.125 million hectares (2.8 million acres) of forest each year.

But he said that at the end of 2011 this figure had been reduced to the equivalent of 450,000 hectares annually.

However, green groups say local authorities are using a murky web of local laws to open up new areas for exploitation despite the national ban, and much logging has continued illegally.

A glaring example is a plan in the province of Aceh on Sumatra island, supported by Jakarta, which activists say could open up a million hectares of protected forest for exploitation despite the moratorium.

The plan, which is likely to be approved soon, is possible because it hinges on Aceh's decision to overturn its own deforestation ban at the local level.

"Countries like mine have a right to develop, but not at the expense of our priceless natural patrimony," said Rudi Putra, an activist who started a petition against the Aceh plan that has gathered almost one million signatures.