Forest and Bird called for the extension after a review in the Journal of Biological Conservation by BirdLife International reported 400,000 birds worldwide were killed annually by recreational and commercial set nets.
Forest and Bird says the toll is conservative, as many deaths go unreported and because ''ghost nets'' can continue to fatally snare birds long after the nets have been abandoned.
The society says the fine nylon threads used in set nets are invisible to diving seabirds, such as penguins and shearwaters, as well as to Hector's dolphins and turtles and the groups wants to extend the ban from 4km to 20km.
Otago fishermen say the information behind the proposal is not based in fact.
''I've fished here for 33 years and it's just not true. Set nets do not catch yellow-eyed penguins, or Hector's dolphins or Maui dolphins. If they've got proof, then let's see it. Bring the evidence to the table,'' Otakou fisherman Neil McDonald said yesterday.
''Forest and Bird seem to come out with this stuff whenever they need some funding, or something. These are international figures and have no relevance to New Zealand at all. They need to substantiate it,'' he said.
''Fishermen are not the barbarians we're made out to be. We're stakeholders in this industry and nobody cares more about it than we do. We've got nothing to feel guilty about. It's so frustrating.''
Extending the set net ban would enhance the birds' chances of survival, Forest and Bird seabird advocate Karen Baird said.
''The current 4km-wide set net ban around the Otago Peninsula's coast should be extended to around the 150m depth contour; the extent to which yellow-eyed penguins are known to forage. This effectively means that the protection zone needs to extend to around 20km offshore.''
There were fewer than 600 pairs of yellow-eyed penguins left on mainland New Zealand and about a quarter of those lived on the Otago Peninsula.
The birds were a cornerstone of Otago's $100 million a year ecotourism industry, Ms Baird said.
''Yellow-eyed penguins are one of five species people go to New Zealand's ecotourism capital, Dunedin, to see. The others are royal albatross, sea lions, blue penguins and fur seals.
''Together, these species are akin to the `big five' in Africa. Losing penguins on the peninsula would be like going to Kenya and not being able to see lions.''
Yellow-eyed penguin colonies on the peninsula were particularly fragile this year and 56 birds have been found dead this breeding season, due to an unknown toxin, Dunedin penguin authority Ursula Ellenberg said.
''Reducing the well-known risk of mortality in set nets would greatly enhance their chances of survival,'' Dr Ellenberg said.
The New Zealand Federation of Commercial Fishermen said the incidence of seabird deaths in set nets was exaggerated.
