Environmental activists in the northern Thai city of Chiang Mai claimed victory on Sunday after the country’s military government agreed not to continue the development of luxury property on forest land.

The decision follows a demonstration in Chiang Mai last week in which more than 1,000 people protested against the construction of a luxury development earmarked to house judges in the foothills of the Doi Suthep mountains.

The demonstration was one of the largest since Thailand’s junta took power in a 2014 coup. It was also one of a growing number of anti-government protests, including in Bangkok, that are putting pressure on the government before a general election planned for early 2019.

Green ribbons symbolising the environmental movement have appeared in public places in Chiang Mai, including on lamp posts and on cars, over the past week.

The Thai prime minister, Prayuth Chan-ocha sent Suwaphan Tanyuvardhana, one of his senior officials, to Chiang Mai on Sunday to talk to protest leaders.

“We have concluded that no one will be living in this housing estate,” Suwaphan said after a meeting with the activists. The area will eventually be restored to the forest, he added.

The government would form a committee with activists and representatives from the local community to determine the future use of the land currently under development, which includes 45 houses, he said.

A decision will be taken later this week, but construction of the homes already under way would have to continue for the government to honour its agreement with the construction firm involved.

Activists hailed the decision as a victory. “What we have now is a promise that Doi Suthep forest will be restored,” said Teerasak Roopsuwan, one of the movement’s leaders.

“I think this could be a model for other parts of the country that public projects must not only be legal, but they must also consider local people’s opinions.”