Prime Minister Stephen Harper earned some praise from environmentalists for his announcement about vastly expanding conservation of the Nahanni River watershed.

"What this demonstrates to us is that the Prime Minister clearly recognizes the important of protecting wilderness and wildlife in North and across Canada for that matter," said Jill Sturdy of the Canadian Parks and Wilderness Society on Wednesday.

At the same time, there are some outstanding issues that must be resolved between the feds, local First Nations and the territorial government regarding natural resource development near the Nahanni.

"We can't open up everything for development but at the same time we don't want to protect everything to the point where there is no basis for an economy," the Northwest Territories' Premier Joe Handley said in Moncton.

Harper announced that 29,000 square kilometres of land will be added to the existing 4,766 square kilometres of the Nahanni National Park Reserve.

"Canada is blessed with the magnificent natural beauty from coast to coast but none more spectacular than Nahanni National Park Reserve," Harper said at a news conference held near the confluence of the Mackenzie and Liard Rivers.

"This is arguably the most important act of environmental protection in a generation."

Wednesday's announcement brings the park's total size to 33,766 square kilometres, or five times the size of Prince Edward Island.

However, while environmental groups have praised the expansion, they would like to see the entire watershed protected, which would push the park up to 38,000 kilometres in size.

Those boundaries would include the site of a potential zinc mine with an ore body valued at an estimated $2.5 billion.

Jonas Antoine of the Nahanni Consensus Team, which counts federal officials and local aboriginals among its members, pronounced his group pleased.

"You can never get exactly 100 per cent of what you want but this is something good," he told The Canadian Press. "It's taken many years because people don't see. People need to come here and see for themselves. You have to see it to truly appreciate it."

NDP Leader Jack Layton canoed the river in 2006 with his wife, fellow MP Olivia Chow, to promote expanding the park.

"We were frankly blown away.  The true meaning of the word majesty struck us. This is a spectacular river," he said in Saskatoon. "Steps to protect this river -- the nature and cleanliness of its water and the biodiversity that's there -- are essential and we certainly welcome the steps that have been announced."

In a news release, however, Layton criticized Harper for not protecting the entire watershed.

"The Harper Conservatives have chosen an arbitrary portion of land rather than protecting the entire watershed," said Layton. "This is a missed opportunity."

Nahanni's significance was first officially recognized in 1972, when then-prime minister Pierre Trudeau established the initial reserve to protect it from hydro-electric development.

In 1978, the UN made Nahanni the world's first world heritage site.

The area provides habitat for wolves, grizzly bears, lynx, woodland caribou, Trumpeter Swans, Dall's sheep and mountain goats.

Victoria Falls on the Nahanni are twice the height of Niagara Falls.

Sovereignty tour

Harper is on a three-day tour of the North as part of his campaign to assert Canadian sovereignty over the region.

The trip comes after a recent Russian submarine expedition that planted a Russian flag on the seabed at the North Pole.

He is expected to make some military announcements in the next few days.

The Conservatives said in the 2006 election campaign they want to establish a deep-water port in the far north.

Some think they might use the site of the Nanisivik mine, located near the eastern end of the Northwest Passage.

Harper is expected to announce a new winter warfare school when he visits Resolute on Thursday.

While that is going on, Canada's military is conducting exercises in the waters off Baffin Island's south coast.

With a report from CTV's David Akin and files from The Canadian Press