LEGAL opinion will decide whether MIS giant Great Southern's 270,000ha estate will be broken up and sold back to family farmers.

The Australian Securities and Investment Commission could be forced to halt the current sale process, being undertaken by receiver McGrathNicol, if it is found not to comply with the Corporations Act.

Member of the Great Southern Committee of Inspection and former Victorian Farmers Federation employee Phil Capicchiano questioned whether selling the estate as one parcel was a reasonable attempt to get the best return on the land.

Farmers could bid on some 80,000ha of Great Southern land located in Victoria if the current sale process was halted, he said.

"Here's a chance for farmers to compete equally with consortia and use the land in a very productive way - arguably more productively than forestry companies ever could - and they're being denied that opportunity by receivers," Mr Capicchiano said.

"If the banks had half a brain, they'd engage farmers. Not only could they get their secured debt but they'd get profit from loaning to farmers to make the purchases."

Mr Capicchiano said ASIC had told the group it would consider intervening if the group produced legal opinion that the sale process undertaken by McGrathNicol did not comply with the Corporations Act.

Mr Capicchiano is waiting on that advice.

Liberal Senator Bill Heffernan said selling the estate off in smaller lots was a "great idea".

VFF president Andrew Broad said excluding the farm sector from the sale "would be not maximising potential return to creditors".

"Some of the land around Portland would not be that hard to return to agriculture," Mr Broad said.

Mr Capicchiano was fuming at McGrathNicol's rejection of a proposal created by his committee, Elders, and the VFF and the National Farmers' Federation to have Elders break the estate up and sell it.

The group is likely to approach administrator FerrierHodgson about the proposal.

McGrathNicol chairman Tony McGrath said the sale process was well advanced and details were confidential.