By Alexandra Valencia
QUITO, Aug 15 (Reuters) - Ecuador will open up part of the Amazon rainforest to oil drilling after rich nations failed to back a conservation plan that would have paid the country not to explore in the area, President Rafael Correa said on Thursday.
Correa launched the initiative in 2007 to protect the Yasuni area of the Amazon basin, which boasts some of the planet's most diverse wildlife, but said he had now scrapped it after it attracted only a small fraction of the sum it aimed to raise.
"I have signed the executive decree for the liquidation of the Yasuni-ITT trust fund and through it, end the initiative," Correa said in a televised address. ITT refers to three untapped oil blocks known collectively as Ishpingo-Tambococha-Tiputini.
Scores of protesters, some with placards gathered in front of the presidential palace shortly after the announcement, angered by the decision, while others opposing them, waved flags in the color of Correa's political movement.
Ecuador, OPEC's smallest member, had planned to forgo opening the Yasuni basin, its more than 800 million barrels of crude and $7.2 billion in income from beneath the jungle floor as part of the conservation plan.
It was aimed at protecting wildlife - a single hectare (2.47 acres) of the Yasuni national park contains more tree species than in all of North America - and the livelihoods of indigenous peoples who fear oil drilling would damage their ancestral homeland.
In return, the government had hoped to receive some $3.6 billion from the international community over 12 years, or about half the value of the oil it would be leaving in the ground, through the fund administered by the United Nations.
In five years, however, only about $336 million had been pledged, mostly from European countries and various environmental groups, the campaign's manager, Ivonne Baki, said in April.
Correa said the plan had only actually received $13.3 million, less than half a percent of its goal.
Last month, Correa set up a commission to evaluate the plan's progress which concluded that "the economic results were not what the state had been hoping for," according to a statement published this week by the vice president's office.
Correa said he had now commissioned technical, economic and legal studies on the basis of which he would seek the backing of the national assembly for drilling in the region, a step required by the country's constitution.
Correa played down the potential impact of oil drilling in the area, saying it would affect only 0.01 percent of the Yasuni basin while his spokesman, Fernando Alvarado, said on Twitter that exploration could be carried out safely in the region.
But opponents will be hard to appease. Adrian Soria, a biologist, 38, and one of the protesters gathered outside the presidential palace, said the Yasuni basin's ecological worth was far greater than that of any oil it could offer.
"Yasuni is important for humanity and as Ecuadorians, we can make the difference ... Yasuni must be preserved and that is more important than the oil," he said.
Correa, a U.S.-trained economist, has won broad popular support among Ecuador's low-income majority with heavy spending on welfare, health, education and infrastructure projects.
He says it is essential for the country to expand its oil reserves in order to direct more state spending toward the poor.
Ecuador's oil output has stagnated at about 500,000 barrels per day (bpd) since 2010 when the government asked oil investors to sign less-profitable service contracts or leave the country.
Since then, oil companies have not invested in exploration. (Writing by Daniel Wallis; Editing by Peter Murphy and Sandra Maler)