LIMA, Peru - A key official in Peru's Environment Ministry resigned Monday over the government's handling of mounting protests against mining projects by highlands peasants who fear for their water supplies.

Jose de Echave told The Associated Press that he quit the job of deputy minister for environmental management because the government "lacks an adequate strategy for dealing with social conflict."

A former director of one of Peru's leading environmental groups, CooperAccion, de Echave had been a key player in negotiations with peasants whose protests have mounted in recent weeks against mining projects, the lifeblood of Peru's export-driven economy.

Such projects account for 61 per cent of the South American nation's exports. But peasants who live near them complain of a lack of adequate oversight to ensure they do not contaminate or diminish water supplies.

The biggest such project being challenged is the $4.8 billion Conga gold and copper mine in the northern state of Cajamarca, an outgrowth of Latin America's biggest gold mine, Yanacocha.

U.S.-based Newmont Mining Corp., which owns a majority of the venture, said it suspended construction at the mine, which is due to begin operation in 2015, for a fourth day on Monday due to continuing protests and vandalism.

Cajamarca state's president and the mayors of surrounding municipalities have been leading protests against the mine since last month. They say its environmental impact study is shallow and are demanding it be re-evaluated.

An 11-page Environment Ministry study completed last week urges modifications to the project to ensure water sources are protected, especially regarding the replacement of four highlands lakes by reservoirs, according to the IDL-Reporteros online news organization, which obtained a copy.

Environment Minister Ricardo Giesecke said in media interviews after the document was leaked that its conclusions do not amount to a rejection of the mine but rather guidelines for improving it.

While not directly criticizing his former boss, de Echave said he was unhappy with the decision of Peruvian President Ollanta Humala to put the chief Cabinet minister in charge of environmental impact studies affecting the mining industry.

Activists say that will further emasculate the Environment Ministry, which already defers to the Mining Ministry on such matters.

Carlos Monge, Latin America co-ordinator for the New York-based watchdog Revenue Watch Institute, has said he believes the change will allow the government to ensure easy approval of more than $40 billion in mining investments lined up before Humala's June election.