A report from Global Witness says logging companies have been granted lumber rights in 60 percent of the country's rainforests in the six years since Ellen Johnson Sirleaf became president of Liberia.
Sirleaf, praised for revoking corrupt and badly managed logging companies when she took office in 2006, has already ordered a investigation into the situation.
Large amounts of illegal timber were used to finance arms sales during the country's civil war.
Global Witness alleges nearly a quarter of Liberia's landmass has been handed to logging companies using secret and often illegal permits, such as Private Use Permits designed to allow private land owners to cut trees on their property, in order to circumvent legislation.
The Liberian government put a moratorium on such permits in February.
"What we're finding out sadly is that the community is not benefiting, the government is not getting the taxes it requires," Liberian Information Minister Lewis Brown told the BBC.
"But more than that the guys are spreading out into the countryside and engage in massive deforestation and this was never the intention."
The West African nation, with some of the largest areas of rainforest in the region, can ill afford to lose control of them, environmentalists said.
"It does mark an extraordinary breakdown of law in Liberia's logging sector, a sector which has received an awful lot of support since the war both from President Johnson Sirleaf and from the United States, the European Union and other international partners," Jonathan Gant, a policy adviser at Global Witness, said.