Norway agreed in May to contribute up to a billion dollars to help preserve Indonesia's forests, in part through a two-year moratorium on the clearing of natural forests and peatlands from 2011.

"Central Kalimantan (Borneo) is a province with large forest cover and peat land and has faced a real threat of deforestation," the country's Reducing Emissions from Deforestation and Forest Degradation (REDD) head Kuntoro Mangkusubroto said in a statement.

Mangkusubroto said the provincial authorities are expected to manage the project properly, ensure its transparency, tackle any corruption and enforce the law against illegal loggers.

"We recognise and fully understand this heavy task, and are prepared to take this on," he said.

Greenpeace warned last month that the deal with Norway was in danger of being hijacked by timber and oil palm companies.

It said "notorious industrial rainforest destroyers" want to manipulate the Indonesian government's ambiguous definition of forests to funnel the funds into the conversion of forests to plantation.

The industries' current expansion plans -- which have support within some government ministries -- seek to treble pulp and paper production by 2025 and double palm oil production by 2020, Greenpeace said.

Indonesia is the world's third biggest emitter of greenhouse gases, due mainly to rampant deforestation by the palm oil and paper industries, which is fuelled by corruption.

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