Bolivia’s President Evo Morales said he will cancel the $420m Amazon highway contract awarded to a Brazilian firm, OAS.

In a news conference, Morales said they started a process to annul the road construction contract, which was granted to OAS, because the company hasn’t complied with the terms of the deal.

"The company had suspended work without justification or authorisation," Morales said.

"The decision would affect the two stretches of road at either end of the route."

Morales did not say if the road project will continue or if the Brazilian firm would be compensated.

The contract for the middle section, which passes through the Isiboro Secure indigenous territory and national park (TIPNIS), lapsed last year after work was halted because of protests by indigenous tribes.

The BNDES, Brazil’s state development bank, was due to fund about 80% of the project to link the Brazilian Amazon to ports on the Pacific coastal areas of Peru and Chile.