FARGO, N.D. (AP) - The Minnesota Department of Natural Resources has denied a permit for a Red River diversion channel around the Fargo area. The permit was considered to be the final hurdle for construction of the $2.1 billion project.

Agency officials say there are better options for flood control and there is a "lack of consistency" with state and local plans. The agency says the Fargo-Moorhead Diversion Authority can appeal the decision.

Minnesota Gov. Mark Dayton has been a frequent critic of the project and last month warned federal officials that the Minnesota DNR might not approve it.

Some upstream residents whose land would be flooded by a holding area in times of high water have filed a federal lawsuit asking for a cheaper project that doesn't flood farmland.