Ms Douglas said the aim of the project was to create an "internationally renowned, top-quality walk" of the calibre of Milford Track and the track around Lake Waikaremoana.
She said DoC had a track record of creating such walks, and any development would be done in a controlled way and subject to resource consent.
DoC had been investigating the project for two years in response to community calls for such a track, and it was part of a conservation mandate to encourage landowners into alternative land uses, away from farming. Ms Douglas said the department had obtained agreements in principle from three of seven Maori trusts that own land by Lake Tarawera that the trail would cross.
It is envisaged that the trusts would be involved in guiding and running lodges to accommodate walkers on the trail.
Ngati Rangitihi is one of the iwi that has land interests around the lake, and Ruawahia 2B owns 1800ha on Mt Tarawera itself.
Spokesman Tipene Marr said discussions were still ongoing with DoC, as landowners hadn't made up their minds whether to support the track yet. However, it would be helpful if Treaty of Waitangi claims were sorted out before a track was built.
If the track did attract visitors, managing tourists' behaviour - including potential litter problems - would be an issue.
"There's viability for us to make money but at what price?"
Mr Marr said he had little sympathy for the conservation society, which he said was made up of members more concerned with "protecting their own piece of paradise" for themselves.
Te Puni Kokiri, the Ministry of Maori Development, said it supported the trail proposal.
"For us, it's about supporting Maori aspirations," regional director Wally Tangohau said.
"It is a track that is well worthy of investments." He said the scenery around the lake was "astounding" and the area would gain world renown from the trail.
"It'll bring it certainly up to a par with the Milford Track and the Routeburn Track."
Tourism operators also voiced their support, saying the trail would be an asset to Rotorua. "It'll bring greater numbers into the community who are looking for a unique experience almost like the Milford or the Heaphy Track experience," said Neville Nicholson, general manager of the Skyline Skyrides gondola and a member of the Rotorua Tourism Advisory Board.
Mr Nicholson said that coupled with planned transtasman flights into the city, the track was bound to generate strong economic returns, including from Australian visitors.
Pam McGrath, general manager of the Buried Village - which is at Lake Tarawera - also believed the trail would benefit the region.
But she shared the concerns of residents in the lake settlement about the impact on the surroundings, and said facilities would have to be well maintained.
DoC plans to build the track in three stages and complete the first stage, for $1.6 million, by the end of 2010.
