Senior US Senator John McCain on Wednesday praised Myanmar's government for the "democratic act" of halting work on a $3.6 billion China-backed mega-dam following public opposition to the project.

"I commend President Thein Sein and other government leaders in Naypyidaw for their bold and responsible decision to suspend construction of the Myitsone dam project," McCain said in a statement.

"They listened to the voice of the people and made a dramatic change in government policy for the sake of the public interest," he said.

"This was a democratic act, and I hope the government in Naypyidaw will continue to respond to the peaceful will of the people to make additional positive changes in other areas."

Washington has praised the decision, but China -- Myanmar's second-largest trading partner and biggest foreign investor -- has criticized the move in a rare public display of discord between the two countries.

The senator, the Republican presidential candidate in 2008, said the project could have caused "irreparable harm to the Irrawaddy River" and praised Myanmar's leaders for bucking "considerable internal and external pressure."

"More than any issue in recent memory, this project and its reportedly disastrous environmental impact have united the Burmese people in overwhelming public opposition," said McCain.

The project had attracted opposition from pro-democracy groups and environmentalists testing the limits of freedom under Myanmar's new nominally civilian regime -- in March the junta handed power to a government whose ranks are filled with former generals.

Green groups have warned the dam would inundate an area about the size of Singapore, submerging dozens of villages, displacing at least 10,000 people and irreversibly damaging one of the world's most biodiverse areas.