The department faces two separate investigations over the demolitions while rumours are swirling that Mr Damrong will be transferred to an inactive post because of his actions.
Prime Minister's Office permanent secretary Tongthong Chandransu said the cabinet on Tuesday ordered him to set up a fact-finding committee.
Mr Tongthong yesterday appointed four panel members to the committee, which will be led by PM's Office deputy permanent Secretary Panchai Wattanachai.
The three other panel members are Kamol Thammaserikul, director-general of the Department of Thonburi Criminal Litigation under the Office of the Attorney-General, Legal Execution Department deputy director-general Sajja Khemajaru, and the PM's Office's Legal Affairs Bureau chief Mongkol Saenghirun.
Mr Tongthong said the committee will look into the operation of the National Parks, Wildlife and Plant Conservation Department in response to complaints filed by some residents and business operators.
But the panel's investigation has nothing to do with the rumoured transfer of the department chief, he said.
Meanwhile, the Natural Resources and Environment Ministry has also set up its own investigation committee, saying the ministry is ready to ensure justice for all parties.
Permanent secretary Chote Trachoo said yesterday he had assigned deputy permanent-secretary Mingquan Wichayarangsaridh to chair the Natural Resources and Environment Ministry committee. Mr Chote denied reports that there had been any transfers from the department as a result of the resorts' demolition.
Before dawn last Saturday, Mr Damrong led 3,300 forest officials to demolish nine luxury resorts which had been ordered razed by the courts for forest encroachment in Thap Lan National Park in Nakhon Ratchasima's Wang Nam Khieo district and Prachin Buri's Na Di district.
Residents and resort owners filed complaints against Mr Damrong and his department at the mobile cabinet meeting in Surin on Tuesday. They are accused of overreacting and breaking the law.
Mr Damrong, who is scheduled to retire at the end of September, earlier said he would continue to crack down on the more than 400 resorts thought to be encroaching on the national park.
He said he had the authority to do so under the National Park Act.
However, Mr Chote said Mr Damrong should be cautious when ordering the demolition of resorts in cases where the courts have not handed down final rulings.
Mr Damrong said yesterday the investigations would provide a good opportunity for him to explain the facts.
"I will carry on with my job, as we need to follow the law. If I don't do it, I will be found guilty of ignoring my duties," he said.
"I will go to the site again as soon as I'm ready," Mr Damrong added.
The department says that of 418 cases of land encroachment in the national park, 22 have been finalised and 20 private houses and resorts have been demolished.
The department has ordered the property owners in question to vacate the premises and tear down their buildings to avoid being targeted next. They include luxury resorts such as Ban Pha Ngam Resort, Him Phu Hill and Green View Resort.