Federal Agriculture Minister Tony Burke has slammed the credibility of PETA's peace offering.
Mr Burke says he is "deeply unimpressed" with the way PETA has this year breached its deal with industry regarding the 2010 phase out of mulesing.
"But industry's got to make its own decisions about how it negotiates with them, if at all," he said.
PETA this week offered the industry a three-point peace deal, promising to remove itself from all wool industry issues if the proposal is accepted.
Wool industry leaders are reportedly seriously considering the offer.