It once provided a tax loophole for the rich and famous, but today much of the Flow Country of Caithness and Sutherland will become Scotland's latest National Nature Reserve (NNR).

The area, 30 miles north of Helmsdale, will join the likes of St Kilda and Beinn Eighe, and more than 60 other national reserves across Scotland, in ensuring its environmental protection. The area could also yet become a Unesco world heritage site.

After the Ice Age, most of the Flow Country was forested with birch and pine, but about 8000 years ago the climate became wetter, and peat and bogs began to form - stopping the trees growing. Man cleared much of the remaining forest. Some 20 years ago, trees were restored - but they were the wrong ones.

Because of a tax loophole created under the Thatcher government, great swathes of non-native conifers were planted in the early 1980s. Until this loophole was closed in 1988, it allowed any investment in woodland to be written off against personal income tax.

Celebrities who exploited it included Sir Cliff Richard, Phil Collins, Terry Wogan, snooker players Steve Davis and Alex Higgins, and Dame Shirley Porter, the then Conservative leader of London's council.

Under these alien conifers, there was a reduction in birds: 20% of the golden plovers; 15% of the dunlins and greenshanks; and even the golden eagles, which depend on these birds for food.

Now the timber has been cleared from the 28,000 acres, 88% of which are on land owned and managed by the RSPB Scotland. It will be responsible for the reserve under a comprehensive management plan approved by Scottish Natural Heritage (SNH), which is providing funding over the next two years to help the RSPB meet minimum standards for national reserves.

Stuart Housden, RSPB Scotland's director, said: "Around 20 years ago, this ancient landscape was subject to large-scale, but in many cases inappropriate, planting with exotic conifers.

"RSPB Scotland was at the forefront in campaigning to protect the Flows, and we acquired a land holding in the centre of the area in 1994. Since then, with the help of the EU, the Heritage Lottery Fund and several government agencies, we have been restoring this great peatland back to its former glory, principally through carefully targeted plantation removal, which allows the bog habitat to redevelop."

Rob Gibson, SNP MSP for Highlands and Islands, has been a long-time supporter of the project. He said: "I am delighted that a new stage in the recognition of the importance of the Flows is being marked today. As one of the biggest blanket bogs in the world, it has a special importance as we tackle the effects of global warming.

"It underlines Scotland has a key role in tackling climate change by safeguarding and promoting the wider understanding of the Flow Country's significance."

Mr Gibson is backing moves for the future recognition of the Flows NNR as a candidate for world heritage status, which St Kilda has already achieved. Ian Jardine, chief executive of SNH, said: "The area is an ideal opportunity for long-term ecological research on blanket bog. We know that peatlands have a very important role to play in climate change as they are massive carbon stores.

"The Flows NNR is an important addition to our series of national nature reserves. It adds to diversity of other NNRs found throughout Scotland. The facilities at Forsinard help the 5000 people visiting it each year to experience and understand a unique and fascinating habitat of international importance."

Blanket benefits