The federal government has given the thumbs down to the proposed Prosperity Gold and Copper Mine in British Columbia's central Interior.

Environment Minister Jim Prentice says the cabinet has rejected the Taseko Mines Ltd. project because of its adverse environmental impact and the damage it would cause Fish Lake and dozens of connecting streams.

The mine was touted as an $800-million project that would create 700 jobs in a region hard-hit by the pine beetle epidemic and the economic downturn in the forest industry.

The federal and provincial governments conducted environmental reviews and each report said the project would have significant adverse effects.

The provincial assessment said despite the negative consequences on fish and fish habitat, the effects were justified in the circumstances.

Prentice also announced cabinet approval of the Mount Milligan copper-gold project in central British Columbia.