THE Victorian National Parks Association and the opposition say the illegal collection of firewood is a problem the government created.
Their statements come after the Department of Environment and Primary Industries launched Operation Trident, a state-wide investigation into the illegal sale of firewood from forests across the state.
VNPA project coordinator Nick Roberts said the issue was caused by the government's scrapping of firewood permits two years ago.
"He now has to conduct an investigation to deal with his embarrassing mistake," Mr Roberts said.
Before 2012 people needed a permit to collect firewood but that year the government abolished the need for permits so residents could easily collect wood from public land for their own use.
Mr Roberts said the policy had been rampantly abused, with people coming from outside areas, collecting firewood indiscriminately and selling it in the city and other places.
This was undermining firewood businesses, harming the environment and meant there wasn't enough wood for locals, he said.
Member for Bendigo East Jacinta Allan said many Bendigo residents had raised problem of illegal firewood collection with her.
She said the government was dysfunctional and that it would be hard to monitor firewood collection given that the government had cut 540 jobs from the department.
But Environment and Climate Change Minister Ryan Smith said the government stood by their decision to remove permits.
"The removal of permits is designed to support families who rely on firewood for heating and cooking," he said.
He said the problem of the illegal collection of firewood had been an issue since well before his government took power.