NAGOYA -- Aichi Prefecture has dropped a controversial plan to build a housing development in the Kaisho Forest, site of the 2005 World Exposition and close to the city of Seto, after the event concludes.

The expo, to be held under the theme "Beyond Development: Rediscovering Nature's Wisdom," has been criticized at home and abroad as a contradiction because the Kaisho Forest was to be cut down and a massive housing complex to go up on the site after the event.

The government changed its tune after a visit last year by officials from the International Exhibitions Bureau (BIE), which is based in Paris.

According to an article in the April issue of Sekai magazine, which went on sale this week, records from a meeting between senior officials of the Ministry of International Trade and Industry and the head of the expo office in Paris show the officials admitting the housing project would destroy the environment.

They also acknowledged that building an apartment complex in the forest is an outdated way of thinking and one that contradicts the theme of the expo.

The housing project was to have cost 50 billion yen and provide housing for 6,000. The prefecture planned to recoup the money by selling the land and homes off after the expo winds down.

The move comes after harsh and consistent criticism from local and international environmental groups.

Groups like the World Wide Fund for Nature Japan and Nature Conservation of Japan had called on the BIE to address the problem, which it did by telling the Japanese government to postpone registering the project and devise a less environmentally destructive proposal.

Aichi Prefecture has reduced the size of the venue and is still trying to draw up a plan that is acceptable to citizens' groups that have been calling for the area to be preserved as a park.

But the new plan will mean cutting the number of visitors to the six-month event and a possible reduction in funding from the central government since projected massive debts are now likely to force a fundamental re-evaluation of the expo.

But Aichi Gov. Masaaki Kanda told the prefectural assembly Thursday that they have not completely abandoned the project.

The prefecture will review alternative means of proceeding with the housing scheme, he said.

"We are not at the stage where we have abandoned the plan," he said, implying that the plan will not be dropped entirely until an alternative site and housing plan are drawn up.