Construction of a $3.5 billion dam project on the lower Mekong River has been put on hold while a study into the environmental impact is conducted.
The decision was announced by a Cambodian official on Thursday after a meeting of water and environment ministers from Mekong River Commission states in the Cambodian town of Siem Reap.
"When the four member countries agreed to conduct a further study, this meant the construction would not start until we have a clear result," Te Navuth, secretary general of the Cambodian National Mekong Committee, said.
The four countries that share the lower stretches of the 4,900 km Mekong - Laos, Thailand, Vietnam and Cambodia - had failed at a meeting in April to reach an agreement on construction of the 1,260 megawatt Xayaburi dam.
The project, which would bring the first dam across the lower Mekong, is being led by Thai builders, power firms and banks and Thailand would take about 95 per cent of the electricity generated.
Communist Laos has ambitions to be the "battery of Southeast Asia", seeing the generation of power for neighbouring countries as the best way to drag itself out of poverty. Until now, it had resisted calls to stop the project despite the dangers highlighted by critics.
An earlier Environmental Impact Assessment by the Lao government was criticised as inadequate by environmentalists and activists.
Experts had warned that dozens of migratory fish species would become extinct if the dam was built. Fish stocks would dwindle, hitting the income of fishermen and the food supply of people residing along the Mekong river. The dam could also prevent the movement of fertile silt needed to replenish agricultural land and as a result crops such as rice that are vital to domestic consumption and exports would be starved of nutrition.
A statement released by the Mekong River Commission after the meeting said the ministers had agreed to approach the Japanese government and other international development partners to carry out the new study.
"Further study will provide a more complete picture for the four countries to be able to further discuss the development and management of their shared resources," Cambodia's water resources minister, Lim Kean Hor, said in the statement.
"The outcome today demonstrates the member countries' continued commitment to work together in the regional spirit of the Mekong Agreement to bring about economic development without compromising sustainability of the livelihoods of their peoples and the ecology," he added.
Vietnam and Cambodia had called for the project to be postponed pending further studies, and state-controlled media in Vietnam had been uncharacteristically critical of allied Laos.
China has built four dams on the upper river, closer to its source, which are equally controversial. Activists say they were responsible for a drought last year that sent lower Mekong water levels to their lowest in half a century.
The Lao government had hailed Xayaburi as a model for clean, green energy that would stimulate its tiny $6 billion economy and improve the lives of its 5.9 million people, over a quarter of whom live below the poverty line, many without electricity.