Cape York traditional owners will be able to start new agriculture and tourism projects as the Federal Court slams Wild Rivers development restrictions.

Indigenous groups are now free to start new horticulture and tourism projects on Cape York after winning a four-year legal battle to undo development restrictions imposed by Queensland’s former Labor government.

But green groups are warning of risky development as environmental protections are wound back.

The Federal Court has declared invalid the April 2009 development restrictions on the Archer, Lockhart and Stewart basins, made under the Beattie government’s Wild Rivers Act of 2005.

Justice Andrew Greenwood said procedural errors had been made with the declarations, adding the former Labor government had exercised an invalid use of power under its own laws.

The Cape York Land Council launched the legal challenge to the Wild Rivers declarations in 2010 on behalf of the Wik, Umpila and Lama Lama people of Cape York Peninsula in far north Queensland.

Native title rights leader and Cape York Group chairman Noel Pearson said the judgment meant new horticulture and tourism projects could begin.

“Traditional owners should decide whether they want conservation or a mixture of both,” he told reporters in Brisbane.

“We don’t want this unilaterally imposed on them by political deals in Brisbane.”

Mr Pearson slammed former premier Anna Bligh, her chief-of-staff Mike Kaiser and then natural resources minister Stephen Robertson for making the declarations only weeks after Labor won an election with Greens preferences.

“They should hang their heads in shame for having put our people through five years of struggle,” he said.

Traditional owner Martha Koowartha, the widow of 1980s Cape York land rights campaigner John Koowartha who successfully challenged Sir Joh Bjelke-Petersen’s government, was elated at the judgment.

“I’m so happy,” she told reporters outside court.

But the Wilderness Society, which backed Labor’s laws, said the judgment meant the Stewart, Archer and Lockhart river catchments would be “exposed to risky industrial development” such as open-cut mining, dams and irrigation.

“There are few rivers left in the world that have escaped being damaged or dammed, and fewer still that are unpolluted,” Queensland campaign manager Tim Seelig said.

Justice Greenwood ordered the Queensland government to pay legal costs to the indigenous groups, which Deputy Premier Jeff Seeney said would not be appealed.

The Liberal National Party is moving to repeal the Wild Rivers Act by August, and introduced an alternative Cape York regional plan in November last year covering the Archer, Stewart and Lockhart catchments affected by the court judgment.

“Under the statutory regional plan, they’ve certainly identified opportunities for mining, for agriculture and for tourism,” Mr Seeney said.

Opposition Leader Annastacia Palaszczuk said the Wild Rivers laws, banning mining within 500 metres of the river catchments, were needed to protect the environment.

“They want to scrap the Wild Rivers areas right across Queensland and that’s something Queenslanders will not want,” she said.