The controversial plan to drill a tunnel to the Milford Sound has been axed by the Government.
Conservation Minister Nick Smith said the $180 million plan, by Milford Dart, to build a route through the Fiordland and Mt Aspiring National Parks, was beyond what was appropriate for a World Heritage Area.
The environmental impacts were "significant" and ''nature gets the benefit of the doubt,'' he said.
The project would have halved the travel time for the 420,000 visitors per year who visit Milford Sound.
''My view is that National Parks are amongst New Zealand's most special and precious areas. They are deemed by legislation to be places where nature rules, not man, and in my view this tunnel proposal runs counter to the intent of the National Park's Act.''
Smith said it was a difficult decision.
''In my time as an MP and as a minister this would be one of the more significant and difficult decisions that I have made. I have given it a huge amount of consideration and careful thought''.
The minister had concerns about the economics and safety of the plan, as ventilation and emergency systems would be costly.
"I am not satisfied that the tunnel can be safely built for a price that makes it economically viable. The risk for the Government under these circumstances is that corners are cut or the project is left half-completed with a clean-up liability for the public."
He was also concerned that corners would be cut to reduce costs and this would pose safety issues as long, narrow tunnels such as this were risky.
Deposits of material removed from the tunnel would "permanently damage the natural and landscape values" in Hollyford Valley, he said.
It was a visit to this site that Smith said ultimately swayed him.
''When I thought about half a million tonnes of tunnel spoil being dumped in the pre-pristine environment of the Hollyrood Valley I took a deep breath and said 'I don't think is a runner'.''
The impact of the new roads and portals at each end of the tunnel, and particularly the impacts on visitors at the entrance to the Routeburn track were also a significant factor.
Over the last few weeks he had felt ''very well settled on my decision to say no''.
He said he had tried to take a neutral perspective of the plan, taking into account the value of tourism to the economy and that Milford Sound was one of the most-visited sites, and the time it took to travel there, though that was not enough to sway him.
He said claims that the site's world heritage status would be at risk were overstated, arguing there were similar projects at world heritage sites around the world.
Smith said his decision was not a criticism of the developers who he had advised this afternoon and who were ''surprised and disappointed'' by the decision.
He said the developers had indicated they would take legal advice about the decision.
Milford Dart managing director Tom Elworthy, in a brief email, said the decision was political.
''[I am] disappointed of course. National trying to out-green the greens. Going skiing.''
Southland District mayor Frana Cardno was jubilant when she heard the decision, shouting the news to those gathered at a council meeting.
''I'm overcome with joy - it's the right decision.''
Stop the Tunnel spokeswoman Trish Fraser, of Glenorchy, said it was a fantastic move.
''We were feeling quite positive because the world heritage status has been getting at Nick Smith over the last few days and his language has been more and more compromising but until we heard the news we were not quite sure how it would turn out.''
Milford Dart last week proposed an alternative tunnel that would be about two kilometres longer and would relocate the eastern but Smith said he had not yet received any advice around it.
The Milford Tunnel project sparked controversy among conservationists and those working to keep the region's World Heritage status.
The proposal was for a single-lane tunnel which would link the Routeburn and Hollyford roads.
At present the drive from Queenstown to Milford is 286km long through Mossburn and Te Anau, and takes about nine hours.
The parks are part of the Te Wahipounamu South West New Zealand World Heritage Area.
Opposition to the tunnel has been significant and there were 1260 submissions on the tunnel.
Opponents argued the tunnel would affect the world's perception of New Zealand's attitude towards conservation and that it would see the area lose its world heritage status.
Te Anau locals are worried about the impact the tunnel would have on their town as the number of tourists - about 500,000 a year - driving through it on their way to Milford Sound, would plummet.
Others said the park could lose its World Heritage status.
Supporters said the idea would save tourists the nine-hour bus ride and allow more people to visit the famous parks.
Smith visited the site last month ahead of making the decision after he received a report from the Conservation Department and held meetings with the developers behind the project.
The tunnel was one of four proposals to increase access to Milford. The others were a gondola, a monorail, and a road linking to Haast on the West Coast.
- Fairfax Media
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