Environmentalists and money managers that focus on socially and environmentally responsible firms complained about HSBC's involvement in the deal but the bank said they would rather help Samling improve than drop it as a client.

'Will we change our standards because of one transaction? No,' said Jon Williams, the head of sustainable development at HSBC, in the bank's first media interview on the issue.

'As long people are moving in the right direction and showing us that they are progressing towards sustainable forestry we will continue to support them.'

HSBC will find out tomorrow if it has been named the sustainable bank of the year by the Financial Times for the second year in a row.

European environmental group Tropical Forest Trust has just completed a review of HSBC's relationship with Samling on the bank's request but the bank does not plan to make the report public.

'The review was done to measure to what extent Samling's operations around the world were compliant with our policy,' Mr Williams said.

Samling's logging of 'primary tropical moist forest', or virgin rain forest, is a point of contention for environmentalists who claimed that helping it list went against HSBC's much publicised rules on lending to the sector. Samling, by its own admission, cuts such forests in Sarawak, Malaysia, but it said the activities were legal as they were done in areas intended for managed harvests.

Francis Sullivan, an adviser to HSBC on environmental issues, said the prohibition on logging virgin rain forests came from its signing of the original Equator Principles.

However, those rules have since been changed and the bank now interprets the rules on forestry lending to be that it is okay as long as the logging activities are certified by the Forestry Stewardship Council, the industry's most reputable judge of which activities are environmentally and socially acceptable.

The Equator Principles are a set of rules created by international banks which prohibit them from financing firms and projects that are environmentally and socially damaging. Samling's logging of virgin rainforests in Malaysia is not FSC certified but it has been awarded another forest management certification and Mr Sullivan said the company was moving towards FSC certification.

A Samling subsidiary has lost its FSC certification in Guyana and the company is trying to regain this stamp of approval.

'We know that it is possible and some companies around the world are logging primary forests in what we believe and the conservation community would generally believe is a sustainable way,' Mr Sullivan said. 'This policy is not open-ended and it's there for a reason, which is to help the forestry industry move onto a more sustainable footing.'

When HSBC introduced its forestry guidelines in 2004, its goal was to get all of its clients in line with the rules over a five-year period. It has already cut ties with some clients that failed to make the mark.

'Almost every NGO and SRI investor we've spoken to thinks that we should engage with this industry and help it move towards sustainability provided that companies are not involved in illegal logging,' Mr Sullivan said.