The mainland's forestry watchdog has intervened to stop the world's biggest paper maker buying a majority stake in a provincial timber company, cautioning against a cheap sell-off of more than 66,000 hectares of state-owned forest. After decades of economic development on the mainland at the price of the environment, it is the first time the State Forestry Administration has called a halt to a foreign acquisition of a state-owned enterprise. Administration spokesman Cao Qingyao yesterday said it had sent a letter to the Yunnan government, asking that it stop Asia Pulp & Paper's (APP) Hainan Jinhai operation buying 58 per cent of the state-owned shares in Yunnan Yunjing Forestry and Pulp. Mr Cao said the administration was concerned because the ownership transfer involved more than 66,000 hectares of forest in the southwestern province. He said the transfer price was much lower than reasonable and was not based on an asset evaluation report as required by mainland policies and regulations, raising the spectre of losses in state assets. He did not give the offer price. 'Our call has met with attention from the Yunnan government. It's actively seeking a proper solution,' Mr Cao said. The two companies signed an agreement in August to set up a joint venture and expand the Yunnan company's annual capacity from 100,000 tonnes to 425,000 tonnes, the APP website said. APP has long been attacked by international environmentalists over claims that it damages the environment by felling native trees to produce paper. Greenpeace China forest programme director Liu Bing said: 'The use of native trees to produce paper is a disaster. We are relieved the forestry administration has this time stood up to stop the acquisition.' An APP public relations officer said he was unaware of the decision to block the deal.