BANGKOK—Thailand will no longer seek China’s financial backing for a high-speed rail line connecting Bangkok to the provincial hub of Nakhon Ratchasima, opting to finance the project on its own, its transport minister said Friday.

Thailand has been struggling to secure what it considers a satisfactory financing deal from Beijing for the 250 kilometer (155 mile) rail line, seen as part of a broader network running from southern China through Laos, and south through Thailand and Malaysia to Singapore.

The main bone of contention was the interest rate at which China was offering to finance the deal, along with the total investment cost. Transport Minister Arkhom Termpittayapaisith said at a news conference that since the approximately $5 billion project is a venture between governments, China should have offered a loan at what he described as a “friendly rate that takes into consideration relations between China and Thailand.”

Thai Prime Minister Gen. Prayuth Chan-ocha said earlier this week during a visit to China that Thailand would finance the project itself after failing to agree on terms with Beijing. Gen. Prayuth said on Thursday evening that he had informed China’s Premier Li Keqiang of Thailand’s decision, and that Beijing had accepted Thailand’s decision.