Hanoi - Vietnam's prime minister cancelled the construction of a luxury hotel inside a popular Hanoi park, local media reported Wednesday. The online newspaper Tien Phong said Prime Minister Nguyen Tan Dung on Monday ordered Hanoi's People's Committee, the city's governing body, to find another spot for the project and to compensate investors for expenses.

The cancellation came after months of criticism from a broad-based citizens' coalition that said the hotel violated zoning rules and would degrade one of Hanoi's few large parks.

Landscape architect Tran Thanh Van, whose February letter of protest to the People's Committee touched off the controversy, said the decision should have been made quickly at a lower level of government.

"This is not a big thing, not worth the prime minister getting involved, but his juniors could not settle it," said Van. "This shows that Vietnam is not healthy on the inside."

Successful citizens' protests are rare in Vietnam's Communist system, particularly when they involve large foreign investors. But the project to build a 376-room Novotel inside Reunification Park, built by socialist volunteer labor in 1958-60, seemed to touch a nerve.

"The Hanoi People's Committee should review their actions, should recognize their wrongdoings, draw their lessons, and decide who should take responsibility," said Huynh Dang Hy, general secretary of the Vietnam Urban Development Association.

Hy said the People's Committee should punish people who worked as consultants on the project and use their payment to compensate investors' losses.

"The main problem here is to define solutions for compensation, which will take a lot of time," said former Minister of Construction Nguyen Manh Kiem.

Kiem said it would be best if the two sides could come to an agreement quickly, to avoid unnecessary time and expense.

Construction of the Novotel hotel in June 2008. In February, letters of protest to city officials by Van and other architects and community organizations prompted a wave of press coverage critical of the project.

Investors are reported to have spent 15 million dollars in construction costs so far.

Hanoi officials initially listed the investors as an unknown Singapore holding company called SIH, but Vietnamese press reported one of the backers is the Vietnamese investment and real estate corporation VinaCapital. The Accor company was to manage the hotel. (dpa)