The Wilderness Society has lost a legal battle to block the camp, slated to be build on Halls Island at Lake Malbena in the Walls of Jerusalem National Park.

The environmental group and other appellants argued developer Wild Drake should not have been granted a planning permit for the project, comprising several huts to be visited by up to 240 helicopter flights a year.

They are worried about the camp's environmental impact and had argued Tasmania's Resource Management and Planning Appeal Tribunal improperly delegated assessment of the project to the state's Parks and Wildlife Service.

But a Supreme Court of Tasmania judgment, handed down on Monday, dismissed the appeal, finding "no error" in the tribunal outcome.

"While we are disappointed with this decision, in the coming weeks we will explore our options," Wilderness Society campaign manager Tom Allen said in a statement.

"The integrity of Tasmania's world heritage wilderness is worth fighting for."

The luxury camp is awaiting approval from federal Environment Minister Sussan Ley.

"We call on her to decide that the proposal should be subject to a detailed and transparent environmental impact assessment that specifically considers the wilderness impacts of this proposal," Mr Allen said.

The Wilderness Society has 21 days to decide whether to appeal the judgment.

The Lake Malbena project has faced several approval-related legal challenges and rallies have been held against the plan.

Australian Associated Press