oThe Tasmanian timber company Gunns has raised the possibility it will not proceed with its planned $2.3 billion Bell Bay pulp mill project.

Gunns has told the stock exchange its board can not agree on whether the Tamar Valley project will go ahead.

It is now accounting for the $250 million it has already spent on the project as an expense rather than an asset.

The money is included in a $800 million asset write-down which the company is anticipating as part of its annual result expected later this month.

Gunns says this does not necessarily mean that the project will not go ahead, only that it is an indication of the company’s decreased confidence about it proceeding.

“The company’s board has been unable to reach a view for the purposes of the company’s 30th of June 2012 financial accounts that the mill project is ‘probable to proceed’ in terms of the concepts defined in relevant accounting standards,” the statement reads.

“The decision taken by the board does not necessarily mean that the mill project will not proceed.

“Rather it is an indication of decreased confidence from the company that is has the ability to influence the mill project proceeding.”

Industry analyst Robert Easement says the announcement highlights external pressures on the company.

“The high Australian dollar has made it hard for them, the falling assets value of their plantations has made it hard for them,” he said.

Company shares have been in a trading halt for almost five months as it tries to negotiate a planned $400 million capital raising.

Gunns says it is unclear when it will emerge from the trading halt.