Ministers announced the Mabira Forest Reserve would remain intact after a study by campaigners Nature Uganda showed the forest would produce more income as a tourist attraction.

About 17,500 acres had been earmarked for destruction to allow the multinational corporation Mehta Group to plant sugar cane for large-scale production of ethanol.

The Ugandan finance minister, Dr Ezra Suruma, announced the U-turn at an official dinner.

He said: “We have committed ourselves to conserving Mabira Forest. There is other land in Uganda suitable for sugar cane growing.”

The study by Nature Uganda earlier this year estimated that eco-tourism to Mabira Forest was worth more than US$316m, while sugar cane production would be worth less than US$20m.

The report also highlighted the forest’s 300 bird species, 200 varieties of trees and nine endemic species, and stressed its role in storing carbon and water.

Environmental groups which had campaigned against the destruction of the forest welcomed the decision to protect it.

Achilles Byaruhanga, executive director of Nature Uganda, which led the Save Mabira Campaign, said: “The economy of Uganda depends on the country’s environmental health.

“Agriculture, tourism and fisheries are core to our wellbeing, making environmental protection an overriding factor in our development.”

Paul Buckley, head of the Royal Society for the Protection of Birds’ (RSPB) Africa Programme, said: “This is a tragedy averted.

He added: “Now Uganda has a brilliant opportunity to really make the most of its wildlife jewels. The site is famous with eco-tourists and slicing it up made no economic sense whatsoever.”

Campaigners were also concerned the destruction of Mabira would violate an agreement with the World Bank, which in 2001 pledged funding for the construction of a hydroelectric dam on the River Nile near the forest in return for government guarantees to protect Mabira.

Kate Martin

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie

Subscribe