The political struggle that led to the decision in the Tasmanian Dam case in 1983 had its beginning much earlier, in the first extensive popular protests made by environmental groups against the hydro-electric power development policies of the Tasmanian Government.

Lake Pedder National Park in south-west Tasmania was proclaimed as a scenic reserve in 1955. In 1967 the Hydro-Electric Commission of Tasmania (HEC) recommended to Parliament that the lake should be flooded by a much larger reservoir as part of the Gordon River Power Development Project. The natural lake had unique qualities and its beauty was famous. The HEC's proposals aroused the ire of environmental groups, both in Tasmania and in other parts of the country. Anger was exacerbated by the lack of a public inquiry into the issue. Legislation to authorise the work passed the House of Assembly in four weeks and was approved by the Legislative Council a month later. Protests and attempts at political pressure at both State and Commonwealth levels continued for several years.

By the time the Whitlam Government took office in December 1972, the environmental movement had become a social and public force to be reckoned with. As a result, the Commonwealth Government set up a committee of inquiry into Lake Pedder. The committee condemned the manner in which the proposals had been decided and approved. It was recommended that there be a three-year moratorium financed by the Commonwealth to allow the issues to be properly investigated and discussed.