Ministers say ancient woodlands will be kept out of commercial hands as they launch a consultation on the future of Forestry Commission lands in England.
Campaigners claim weakening public ownership of the forests will damage nature and restrict access.
But the consultation documents propose that "heritage forests" such as the New Forest will be managed by charities, with access rights preserved.
Commercial operators will manage commercial forests on long leases.
Community and civil society groups will be given the opportunity to buy or lease forests.
The consultation covers about 1,500 pieces of land totalling 2,500 sq km - the 18% of English forests owned by the Forestry Commission.
Scotland, Wales and Northern Ireland are not affected by the plans.
Environment Secretary Caroline Spelman said disposing of the lands would enable the government and the Forestry Commission to focus on their most important roles.
"State control of forests dates back to World War I, when needs were very different," she said.
"There's now no reason for the government to be in the business of timber production and forest management.
"It's time for the government to step back and allow those who are most involved with England's woodlands to play a much greater role in their future... and we will make sure that public access is maintained and biodiversity protected."
Where charities manage heritage woodlands, Ms Spelman told BBC News, the government will provide financial assistance.
The government points out that 69% of English forests are already in private hands; and that New Zealand, South Africa and the Australian state of Queensland have all gone through similar processes in recent years.
Despite this, opponents including the Archbishop of Canterbury, Dame Judi Dench and Bill Bryson have described the privatisation as "unconscionable".
In a letter to the Sunday Telegraph, they warned it could compromise nature protection and curtail rights of access enjoyed by millions of people.
And the campaign group 38 Degrees says more than 250,000 people have signed its online Save Our Forests petition.
"Behind the spin, our public woodlands are still in danger," said its executive director David Babbs.
"Opinion polls suggest over 80% of the public wants to keep our woodlands in public hands for future generations; yet the government is only consulting us on how the woodlands should be privatised.
"What kind of consultation is that?"
The RSPB took a more nuanced view.
"We remain open-minded about these proposals - but we need to be reassured that whoever manages former state-run forests, whether private individuals, companies, leaseholders or trusts and charities, will protect our native wildlife," said conservation director Mark Avery.
But Joe Fielding, a chartered forester who runs the website Woods 4 Sale, said the move could be beneficial.
"The Forestry Commission has done a pretty poor job of managing some of its land, and I tend to believe our woodlands would be better managed in the private sector anyway," he told BBC News.
The Woodland Trust, a conservation charity, called on the government to step up protection for ancient forests before disposing of them - putting protection on a par with the most iconic buildings.
It is particularly concerned about the 20,000 hectares of ancient woodland that were planted with conifers in the middle of the last century.
The option of restoring them now, said chief executive Sue Holden, "represents the biggest opportunity for woodland wildlife conservation in England I have ever known".
"Replacing conifers with more conifers will smother the life out of these woods," she said.
"If these woods are not restored, we may lose a once in a lifetime opportunity."
The consultation runs until mid-April.
BBC news website readers have been sending in their reaction to this story. Here is a selection of their comments.
It is unlikely community groups will be able to raise enough money to buy local woodlands. The land will probably be bought by developers and turned into housing developments, private leisure facilities or wind farms. The forests belong to the people. We hold them, in trust, for our children and our children's children, as previous generations have held them, in trust, for us. Christine Davies, Cambridgeshire
We should all have the right to enjoy these forests and woodlands as they are part of our heritage. The woods and forests are not the government's to sell. John Birch, London
I agree, the government needs to save money and make money, to get the national debt down. However, this is yet another example of short term thinking and arrogance of politicians. Paul, Boston, Lincolnshire
This whole proposal I feel is a dangerous move. I don't think anyone can deny that this would effectively turn our woodlands into business. Woodland is not profitable unless the resources there are exploited. I definitely don't want to see our woodlands under commercial ownership that would always be looking for that extra return on their purchase. Alasdair Sayell, Bradford, West Yorkshire
I will never vote Tory again. To sell off our beautiful woodland is immoral and a disgrace to the people of this beautiful country who care about the environment. It should be preserved for future generations, not replaced with concrete and a few more supermarkets. Delilah Thompson, London
The government say they will preserve rights of way but we only have to look at what's happened in the Lake District over the last few months - car parks there have closed rights of way. Eileen Clifford, Preston, Lancashire
I am a keen cyclist and the forests offer an exceptional place to go and ride. I am concerned that my rights are not going to be enshrined in law and I may lose access rights to the land. James, Birmingham
Here in the Forest of Dean we have always had the freedom to roam. Nothing must change. What the government is proposing is criminal. No government can guarantee these lands will be protected under these new proposals. Lynda Ward, Newland, Gloucestershire