Romanian lawmakers on Tuesday rejected a controversial new mining bill that would have cleared the way for a huge Canadian gold mine project in the heart of Transylvania.

A total of 160 members of the lower house voted for the draft law, 44 short of the minimum needed for the text to be adopted.

The vote comes as a new setback for Canada's Gabriel Resources, a month after the upper house rejected another draft.

Under the bill, mining operations could be declared "projects of exceptional public interest provided direct and indirect benefits surpass the negative impact on the environment".

This article was meant to help mining companies expropriate private property and get the requisite permits more easily, analysts say.

Canadian miner Gabriel Resources, which is backed by American billionaire John Paulson and the Israeli Benny Steinmetz Group, hopes to extract 300 tonnes of gold in the picturesque village of Rosia Montana.

The open-cast mine would be the biggest in Europe, but use thousands of tonnes of cyanide and damage Roman-era mining galleries.

Alburnus Maior, an association of Rosia Montana villagers opposed to the mine plans, hailed the negative vote.

"We hope this bill aimed at clearing the way for mining companies will be the government's last pathetic attempt to impose cyanide on Romanians," the president of Alburnus Maior Eugen David said.

Hundreds of protesters had rallied ahead of the vote in front of parliament and later occupied the ombudsman's office in Bucharest.

Around 100 people also protested in Cluj, the major Transylvanian city, blocking access to the local headquarters of political parties.

The mine plan has sparked a wave of protests unprecedented since the 1990s, with tens of thousands of Romanians taking to the streets every weekend for the past months.

mr/iw/rl

GABRIEL RESOURCES