MEXICO CITY — In a surprise reversal, the government decided to yield to protests by machete-wielding farmers and radicals and cancel plans to build a new international airport on the eastern outskirts of Mexico City.

In what is likely to be seen as victory for often-violent protesters and a setback for President Vicente Fox's ambitious development plans, the Communications and Transport Department announced late Thursday it would consider other sites for the new terminal.

"Given the rejection by the farm communities of the original project, and given that, under the new circumstances, there are convenient alternatives," the department said in a press statement, "the government has decided to cancel the expropriation orders" that would have forcibly purchased farmers' land for the site.

"This shows that this government is willing to negotiate, that it respects people's rights, and that it is not going to try to force its decisions down people's throats," said Communications and Transport Secretary Pedro Cerisola.

Cerisola said the government dropped the project because negotiations with farmers who want more money for their land would have taken years, longer than the current airport can keep handling increasing volumes of air traffic. He also said the government had already offered as much money as it could.

Fox had pledged to go ahead with the airport project as recently as three weeks ago, when farmers protesting the airport clashed with police and seized more than a dozen hostages to win the release of jailed protesters.

The planned $2.3 billion project envisaged a new airport with six runways, to replace the existing, 91-year-old facility, which can only use one runway at a time and cannot be expanded because it is hemmed in by homes and businesses near the center of Mexico City.

The alternatives to the planned new site are likely to be further from the city, more expensive or smaller

Farmers in 13 communities that would have seen some or all of their farmland eaten up by the new terminal were angered in 2001 when the government offered them $3,000 per acre.

After the July 11 hostage taking, the government raised the offer to $21,000 per acre. Most farmers said even that was not enough and demanded a better offer, which Fox's administration was apparently not ready to make.

Throughout the protests, many of the farm communities were willing to negotiate, but a small hard core of radical farmers — supported by dozens of anarchist and leftist groups, and hundreds of anti-globalization activists — rejected any sale or negotiation.