Laos confirms has suspended controversial Xayaburi dam

(Reuters) - Laos confirmed on Friday that work has been suspended on a controversial $3.5 billion hydropower dam on the Mekong River after requests from neighboring countries and environmental groups, the first time the government has publicly declared the project halted.

"The Lao government decided to postpone it. We have to do further studies," Foreign Minister Thongloun Sisoulith told reporters on the sidelines of a regional meeting in the Cambodian capital, Phnom Penh.

Thongloun Sisoulith said a seminar on the matter would be held on Saturday in Luang Prabang in Laos and that concerned parties would be able to visit the site of the dam.

Vietnam, which has opposed the project, welcomed the news, saying the dam was one of the biggest concerns for countries along the Mekong River.

Laos had agreed to suspend the project last December, pending further studies led by Japan, after protests that the 1,260 megawatt dam would harm migratory fish and the livelihood of fishermen and communities along the river.

However, campaigners have said Thai construction company Ch Karnchang Pcl, the main developer, was going ahead with work on the ground, a claim the government denied in local media last week.

Japan said this week it had seen no request from the countries concerned for funds for an environmental impact assessment.

"If the Commissioner of the Mekong River is going to produce a plan to conduct the scientific environmental survey, I think Japan has already made it clear that it is ready to positively consider assistance," said Naoko Saiki, a deputy press secretary at Japan's Foreign Affairs Ministry.

The project, which would bring the first dam across the lower Mekong, is being led by Thai builders, power firms and banks. Thailand would take about 95 percent of the electricity generated.

Laos, Thailand, Vietnam and Cambodia share the lower stretches of the 4,900 km (3,044 mile) Mekong.