Thousands rallied in southern Malaysia on Sunday against a government-backed $56-billion petroleum hub they say will force thousands out of their homes and damage a fishing community.

Environmentalists from across the country gathered in the sleepy coastal town of Pengerang where the project, spearheaded by state oil giant Petronas and also involving private companies, is due to be completed by 2016.

A coalition of local NGOS say the 170-billion-ringgit Pengerang Integrated Petroleum Complex -- an industrial park for the oil industry -- will harm the livelihoods of local residents and fishermen in an area famed for its lobsters.

On Sunday protestors, mostly dressed in green, heard opposition leaders promise to cancel the project if they come to power at national elections that must be held by the middle of next year.

Organisers said 8,000 demonstrators took part although reports estimated the crowd to be less than half that figure.

"We want development but not when it oppresses the people. The government must give the public the right to decide on the location of such projects," Anis Afida Mohd Azli, who is leading opposition to the project, told AFP.

She added the NGOs will hand over a list of demands to the state government on October 8.

The protest movement began early last year as local anger mounted against the 22,500-acre petrochemical hub.

Prime Minister Najib Razak has faced numerous protests over projects allegedly harmful to the environment since taking power a year after his Barisan Nasional suffered its worst ever electoral result in 2008.

A green movement, largely supported by the opposition, has gained momentum in recent years with Australian rare earths producer Lynas Corp bearing the brunt of the backlash over a planned plant near an eastern resort town.