Transportation Minister Frank Klees has halted route planning for the controversial mid-peninsula highway under threat of a court challenge by Burlington and Halton.

Klees yesterday abandoned his attempt to limit environmental studies of the 130-kilometre corridor through Niagara, Hamilton and Halton.

At the same time he said he would restart the approval process after consulting further with the municipalities and other stakeholders.

It's a stunning -- if temporary -- victory for those who don't want a new road to slice through the Niagara Escarpment in Burlington.

It's a setback for Niagara and Hamilton politicians who say the mid-pen would speed cross-border traffic, spur economic growth and ease congestion on the Queen Elizabeth Way.

At issue are proposed terms of reference for an environmental assessment of the megaproject.

Critics say the terms are illegally narrow. As the public comment period on those terms came to an end a week ago, Burlington and Halton applied to have them reviewed by Ontario's Divisional Court.

A hearing on the application was headed off yesterday when Klees sent a letter to Environment Minister Jim Wilson withdrawing the terms.

Burlington Mayor Rob MacIsaac said he hoped the withdrawal "signals an opportunity for the ministry to meaningfully address the concerns we have been raising for some time. MacIsaac said his city is willing to work with the ministry, Hamilton and Niagara "to find an expeditious way of moving forward."

Klees spokesman Brian Kelcey said: "The government remains committed to moving ahead with the highway. This is not a withdrawal of the project." He said the terms would be rewritten and resubmitted within "weeks, not months."

Kelcey said the new terms would include changes negotiated with Burlington before the court challenge and would "more accurately clarify the sensitivity of our environmental assessment process."

The minister's adviser said the province is willing to go to court if necessary, but doesn't want to do so "without being absolutely certain the residents of Burlington and everyone else who, in our view, would be beneficiaries of the highway, are certain of how flexible the terms can be."

Burlington MPP Cam Jackson, who clashed with Klees over the mid-pen in the legislature last week, said he was encouraged "the minister listened to my advice and listened to the concerns of our city and region."

Jackson said he wants the assessment split so the route from Fort Erie to Hamilton is evaluated separately from the section through Halton, adding that "in no way should it cut through the escarpment."

The MPP also noted the Divisional Court last week struck down sections of provincial law allowing the environment ministry to limit the scope of an assessment as the transportation ministry was asking it to do on the mid-peninsula highway.

Jason Thorne of Coalition on the Niagara Escarpment said he thinks the court ruling may have been a key factor in the decision to withdraw.

In any event, he said, the withdrawal shows Burlington and Halton were on the right track.

Thorne said he hoped Klees would now broaden terms of the assessment, as mid-pen critics have been asking for a year.

Sue McMaster of Citizens Opposed to Paving the Escarpment also wants the terms widened.

She said the ministry was wrong to seek an assessment that excludes the issue of need for a new highway and possible alternatives.

She also said: "We are looking for the minister now to come clean on the toll issue and to listen, actually listen, to our concerns."

Stoney Creek MP and Labour Minister Brad Clark said he'd "rather see a six- to 10-week delay now than have a protracted fight with Burlington on an environmental assessment.

"I believe we can come to a resolution with Burlington in that regard."