Green financing provided by banks to fund a politically sensitive Tassal salmon farm in Tasmania have been criticised by two of the country’s best-known environmentalists who described the use of “sustainability linked” loans as wrong and damaging to Macquarie Harbour in the state’s west.

In a move that sets up a high-profile showdown between the environmental movement and two of the nation’s largest banks, author Richard Flanagan and businessman Geoff Cousins said the description of the loan extended by Commonwealth Bank, Westpac and Rabobank to Tassal was misleading.