"After careful consideration, we just cannot take the risk and destroy an environment that is intact. We need to look for more environmentally friendly sources of energy," Chief Minister Musa Aman said.

In 2006, state power company Tenaga Nasional's chairman Leo Moggie insisted the 300 Megawatt plant would have minimal impact on the environment.

But local environmentalists feared the coal plant would damage the environment, including the pristine Danum Valley forest.

"After weighing the pros and cons, the cabinet decided to do away with this proposal because we do not want to risk the welfare of the communities in the area including their health," he added.

Musa also said the decision to cancel the power plant was based on the fact that the proposed site was close to vital ecotourism sites.

"The proposed site is in proximity to conservation area like Darvel Bay, Malian Basin, Danum Valley and Ulu Segama, which are areas with highly sensitive ecosystems," he added.

"We cannot allow for such a plant to be built because these conservation areas have been designated as ecotourism sites."

Musa said Tenaga and the local Sabah Electricity had been ordered to look for alternative sources of energy and sites.

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