The federal government has opted to pass on a proposal to build a mine in a pristine part of the British Columbia Interior, citing "overwhelming" evidence that the project would cause significant environmental damage.

Ottawa rejected plans for the Prosperity Gold and Copper Mine on Tuesday because of the effect it would have on a lake and the ecosystem that depends on it.

"Fish Lake would be drained, and there would be the loss of all the associated wetlands and a number of streams," Environment Minister Jim Prentice said. "Really, it was the loss of the whole ecosystem, which was pretty pronounced in terms of its environmental effects."

"The loss of the job opportunities is difficult, but at the end of the day we have a responsibility to strike an environmental process and to follow the recommendations," he said on CTV's Power Play.

The $800-million Taseko Mines Ltd. project was touted as a way to create 700 jobs in a part of the province that has been hurt by problems in the forest industry and by the pine beetle epidemic.

First Nations in the province had warned Ottawa that they would fight the mine if it was approved.

"Our people are willing and ready to defend our lands," local Chief Marilyn Baptiste said in September. "As one of my elders had said when we were going through the panel hearings, she will be there on the road in her wheelchair. She will have her shotguns, and she will not miss."

Both the federal and provincial governments held environmental assessments on the proposed project. Prentice said the province came down in favour of the mine, while a federal panel recommended against allowing it to proceed.

The federal recommendations were "overwhelming," Prentice said.

"They essentially said there would be very significant environmental effects and there was no way that they could be remediated. That's what's driven this decision."

Prentice also announced that the federal cabinet has approved the Mount Milligan copper and gold mine in central B.C.

While the Mount Milligan project "also involves the loss of some wetlands and a lake," Prentice said, the project can likely be built in a way that mitigates the environmental effects.

With files from The Canadian Press