The Solomon Islands government says it will not allow untreated water to be pumped from the Gold Ridge mine tailings dam despite a WHO report it commissioned declaring the water safe.
The Australian owner of the closed mine, St Barbara, says the dam is a flood risk and environmental threat.
An official in the Prime Ministers Office, Dr Christopher Vehe Sagapoa, says releasing the water would pose too great a threat.
"For Solomon Islands you cannot distance environment from the people or humans. We interact with the environment, we live with the environment we use the water for cooking and all that. To distance the environment in this case from humans is impractical for the downstream communities."
Dr Christopher Vehe Sagapoa also says a Papua New Guinea company may link up with landowners and buy the mine.
He says lack of finance, expertise and experience in the industry prompted the government pull out of the tentative deal.
"There is an investor from Papua New Guinea that is coming in to try and create a joint venture with the landowners to purchase the mine from St Barbara. It hasn't come to our knowledge how they have progressed with their arrangements and the government is not in the arrangements."