Australia on Tuesday halted the approval process for Indian infrastructure giant GVK's huge US$6.3 billion coal mine amid a dispute over environmental assessments affecting the Great Barrier Reef.
The Alpha Coal Project in the northeastern Galilee Basin was given the green light last week by Queensland state authorities, who then gave the national government 30 days to approve it.
But federal Environment Minister Tony Burke said he would not yet sanction the project because the Queensland assessment lacked information, including on the impact on the world's largest reef.
"I am today stopping the clock on the process which has been given to us by the Queensland government," Burke said.
The minister said he was in constructive talks with GVK, which has an 80 percent holding in the project, and would be seeking more information from state authorities.
"I intend making a decision as soon as an informed decision can be made," he said, dismissing the approach taken by Queensland, which recently elected a conservative government, as at odds with the federal Labor administration's approval standards.
"I cannot have a situation in front of me where you have thousands of jobs on the line, and the environmental asset at stake is known as the Great Barrier Reef, be subject to this sort of political game," Burke said.
The mine is expected to generate 3,600 jobs during construction and nearly 1,000 once in operation as it produces about 30 million metric tons of thermal coal annually.
Queensland Premier Campbell Newman said Burke was risking the state's economic future.
"Tony Burke wants to shut the resource industry down in Queensland to pander to green groups," he told state parliament.
Queensland hopes to see a boost of Aus$1 billion per year to the state economy from the mine, which is about 20 percent owned by the world's richest woman Gina Rinehart, once it is operational.
The political war of words could impact other projects planned for coal-rich Queensland, with Burke threatening to take back control of major environmental approvals from the state government.
The minister said he was considering suspending an agreement on joint environmental approvals between Queensland and the federal government, meaning each would then have to conduct separate assessments, resulting in duplication.
As it develops the rich coal deposits of Queensland, Australia is under increasing pressure to ensure the protection of the Great Barrier Reef and its marine life from run-off, port development and increased shipping.
A UNESCO report released at the weekend urged decisive action from Canberra to protect the coral from the gas and mining boom and warned the reef risked being put on its list of world heritage sites deemed "in danger".
In response, Campbell said: "We will protect the environment but we are not going to see the economic future of Queensland shut down."