The shed is being turned into a multi-level woollen mill, where school children and technical students will see Australia's finest merino wool washed and spun.

More than 30 Bentley Komet sock-making machines from the 1890s to early 1900s - the Rolls-Royce of knitters - sit in the massive shed awaiting recommissioning.

As well as those machines, wool producers want to rescue the last worsted mill for the boutique mill.

Worth about $20 million in its day, the scouring, spinning, dyeing and knitting plant will be sold this month at CSIRO in Geelong, possibly for scrap metal, to the highest bidder.

The CSIRO says it owns the equipment but the terms on which it acquired title using government funding and wool growers' levies are confidential.

Peter Crisp says it's a cover up.

''What I find so interesting is this executed sealed document, (dated) October 12, 2001.

''A deed we will never know the contents of and which absolves any ownership claim from Australian Wool Innovation or from Australian wool growers.''

A lot of wool growers have given AWI, their peak industry body, an ultimatum - either help acquire the equipment or allow China and India to rebuild their industry overseas.

Supporters including the Australian Superfine Wool Growers' Association, and specialist studs, would rather process and develop their fibre at Gunning than go offshore. As well as cornering most of Australia's wool processing, Chinese interests are offering large amounts of money to Australian breeders for their merino genetics, to improve their own merinos in China.

AWI's chief executive Stuart McCullough said the research and marketing body would not buy the equipment. ''Our view is that the running costs, replacement parts and employment of qualified expertise will ultimately dwarf the purchase costs of this antiquated equipment.''

Mr Crisp believes as well as processing small batches of wool, the mill would educate students who now have to go overseas to study.

''All this worsted plant and equipment, admittedly old in the scheme of things, around 1985, is European, Swiss, Italian-made, all in concours, as-new condition.

''I know for a fact that there has been interest from South America for all the gill boxes which someone will buy as one lot then on sell for a greater profit.''

The Crisps have invested more than $650,000 in the mill and have expressions of interest from the University of Sydney, the Australian -American Fulbright Commission and the University of New England.

AWI chairman Wal Merriman has also written to the Crisps supporting the mill's educational aims. More talks with AWI are under way.

Mr Crisp has a network of people for a business case. ''I'm sure if a vote went to every wool grower in Australia, this would go ahead. By approaching it this way (involving AWI) it would give everyone ownership. We don't want ownership, we'd prefer to be trustees.''

The historic shearing shed was first built in Harden around 1856. In 1912, John Garry won half of it in a game of poker, and it's this half that was moved from the Harden Region to Gwandoban, Binalong, in 1914. About 10 years ago, the Crisp family moved the shed again.