Germany suspends Turkish dam funding on enviromental concerns

"The contracts must be annulled if the protection of human beings, the environment and culture in the region is not ensured," a spokesman for the overseas development ministry told reporters.

Germany, Austria and Switzerland had approved guarantees to companies from their own countries that were investing in the 1.2-billion-euro (1.7-billion-dollar) project near the Iraq border.

Austrian Foreign Minister Michael Spindelegger said last week Turkey had not yet fulfilled the criteria and Austria might withdraw from the project.

The Ilisu Dam project in southeastern Anatolia, near the province of Batman, has long been subject to debates. Batman’s ancient city of Hasankeyf is the focus of the debate because it will be submerged under dam water once the project is completed.

Environmental and civil society groups have sharply criticized the construction of the dam because it would lead to the displacement of some 50,000 people and flood historical ruins from ancient Mesopotamia in the city of Hasankeyf.

The project, which has been planned since the 1980s, aims to harness the energy of the Tigris river.

The spokesman said Berlin had already suspended export credit guarantees because Ankara had failed to address environmental problems linked to the dam’s construction by Dec.12, a deadline set in October.

Turkey now has another 180 days to address the issues or face Germany's permanent withdrawal from the project.

A state secretary at the development ministry, Erich Stather, told Frankfurter Rundschau newspaper on Monday that the dam now "no longer had any chance" of receiving German funding.

He said Germany felt it had been "led around" by Turkey and that the only reasonable response was to cut financing. "We won’t let them play games with us anymore," Stather said.