Ecuador has abandoned a conservation plan that would have paid the country not to drill for oil in previously untouched parts of Yasuni National Park in the Amazon rainforest.
President Rafael Correa said rich nations had failed to back the initiative, leaving Ecuador with no choice but go ahead with drilling.
The park is one of the most biodiverse areas in the world.
Hundreds of people gathered in Quito to protest against Mr Correa's decision.
Oil exploitation has been taking place in parts of the Yasuni National Park, which covers nearly 10,000 sq km (3,860 sq miles), since the 1970s.
Oil is Ecuador's main export. Exploitation of the new area is expected to start in the coming weeks.
'World failed us'
The UN-backed scheme to attract donations to forego drilling in the east of the park was launched by Mr Correa in 2010.
The aim was to raise $3.6bn, 50% of the value of the ...