The squirrel glider is a small, nocturnal, tree-dwelling animal that lives in tree hollows and native tree canopies. It is listed as a threatened species under state legislation.

The Lake Macquarie-Wyong area has one of the highest populations in the state - about 5000 of them to 30,000 hectares.

However, in Lake Macquarie, about 24 per cent of its habitat is likely to be affected by development by 2030. About 8 per cent of that is protected in conservation reserves.

To combat this, Lake Macquarie council has drafted the Lake Macquarie Squirrel Glider Planning and Management Guidelines.

The guidelines set parameters for development in areas inhabited by squirrel gliders, which, if the guidelines are approved, will be monitored and protected.

Key issues facing the species include native vegetation clearing, road widening and bushfires.

Planning approaches include field surveys, mapping squirrel glider habitat and population, and researching the effectiveness of nest boxes.

Local ecologist Michael Murray, of Forest Fauna Surveys, contributed to the guidelines. He has been working with squirrel gliders for 30 years and said the guidelines would go a long way to their protection.

"Unless something is done now, [squirrel gliders] will become extinct in some areas," he said. "The guidelines will help nip the problem in the bud before it's too late to recover."

Mr Murray said the effect of development on squirrel gliders could be seen in Newcastle.

"In areas like Charlestown and Tingira Heights there are still significant parcels of bushland that have allowed [squirrel gliders] to survive.

"When you get to Newcastle they are basically extinct because of the extent of development."

The draft is on public exhibition for 60 days from July 13. See lakemac.com.au to read and comment.