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Honey Fungus and Wood Chips
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This suggests that mulches are safe to use. What you describe is not necessarily Honey fungus. Generally see black 'bootlaces' rather than white threads. If it is however, the fungus is likely to spread by root contact between neighbouring plants and removal of the mulch will make no difference. Very little you can do if it is Honey fungus - see factshhet for tips and pick plants with some resistance.
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