The federal government again rejected an open-pit gold-copper mine in B.C.'s Interior on Wednesday, citing environmental concerns.

The adverse environmental effects of Taseko Mines' New Prosperity project could not be justified, according to a decision by federal cabinet that was announced by Environment Minister Leona Aglukkaq.

The decision comes after an October federal environmental assessment panel report found serious flaws in the Vancouver-based company's project.

After considering the panel report, the federal government agreed with its conclusions, according to a Canadian Environmental Assessment Agency news release.

"The Government of Canada will make decisions based on the best available scientific evidence while balancing economic and environmental considerations," said Minister Aglukkaq in the release.

But Aglukkaq suggested Ottawa has not yet closed the door on the prospect that a mine could yet be built in the area, located about 125 kilometres southwest of Williams Lake.

"The government will continue to make responsible resource development a priority and invites the submission of another proposal that addresses the government's concerns," she said.

Taseko's newly rejected proposal was its second go-round and the mine was strongly supported by the provincial government. B.C. Energy Minister Bill Bennett twice travelled to Ottawa to lobby for approval of the project, but the federal government rejected its first proposal in 2010 and its second this week.

The October panel report found the mine, which would have covered 27 square kilometres in the Fish Creek watershed, would result in the total loss of Little Fish Lake to a 12-square-km, 115-metre-high tailings pond and likely contaminate nearby Fish Lake and the upper Fish Creek system.

Brian Battison, Taseko's vice-president of corporate affairs, told The Sun the decision was a terrible disappointment for thousands of people.

"We fundamentally disagree with the decision made by the Government of Canada and we would say that this is not the end," Battison said. "Saying no to a project of this magnitude and importance to B.C. is not an acceptable conclusion. This project is just too important."

The company projected the mine would create 550 direct jobs, generate $340 million in annual gross domestic product, and bring the government more than $1 billion in revenue over two decades of operations. The project is among the world's largest undeveloped gold-copper deposits.

Battison said after the first proposal was rejected by the federal government, the door was similarly opened for the company to submit a revised plan.

"They invited us to come up with a new design and to address concerns," said Battison. "We took them up on the invitation and we got the finest engineering firms in the world to create a new design."

But Taseko's president alleged in November that the federal government and the panel had ignored a newly designed tailings basin in preparing its report. The government balked at the claim, but Battison raised it again Wednesday, stating Aglukkaq relied on "flawed conclusions" to arrive at the wrong decision.

"The Government of Canada has turned its back on the people of the Cariboo," he said, adding it had abandoned its own priority of generating jobs and growth.