The government in Qidong in Jiangsu province just north of Shanghai announced on its website Saturday that the plans had been scrapped. The official Xinhua News Agency says thousands of residents took to the streets Saturday to protest.
Chinese have become more outspoken about environmentally risky projects in their backyards, with pollution a leading cause of unrest. Earlier this month, Shifang city in southwest China stopped plans for a copper plant after thousands of protesters clashed with riot police.
The water-discharge project was to be part of a paper-making factory. The government did not say if the plans for the factory have also been dropped.