CAIRO, August 5, 2008 (AFP) - Egypt agreed on Tuesday to halt the construction of a fertiliser plant near a popular beach resort on the Mediterranean coast after months-long protests from residents and environmentalists, the official MENA news agency reported.

The Egyptian Supreme Council for Energy decided to 'cancel the controversial industrial project by E-Agrium company,' the council said in a statement carried by MENA after a meeting chaired by Prime Minister Ahmed Nazif.

The council said 'tourist projects should be given first priority.'

Angry residents of the Mediterranean resort of Ras al-Barr had protested for months against the construction of the 850-million dollar Egyptian-Canadian project by a company called E-Agrium.

Protesters and environmentalits had said the plant -- which had planned to produce 1.2 million tonnes of urea a year-- would threaten the local ecology and deter tourists from visiting the area.

Ras al-Barr is a beach resort hugely popular among middle-income Egyptians who flock to its sands over the summer months.