Until the 1970s, the United Fruit Company - now known as United Brands - dominated Tela, a sleepy town on the Caribbean coast of Honduras. "People worked with the company, travelled on its trains, bought groceries at its stores, were treated in its hospitals and buried in its graveyards," says Carlos Aragón.

When the company moved its headquarters away to be nearer Honduras's main container port, however, the pre-eminent banana town of Latin America's archetypal banana republic fell into a long decline. "Cash simply dried up when it moved," says Mr Aragón, a former personnel manager for United, who now runs a small hotel.

But Tela is at the centre of an attempt to develop environmentally sustainable tourism that could generate up to 5,000 jobs and provide an economic lifeline to its 100,000 or so inhabitants, many of whom have come to depend on remittances.

Tourism is a relatively small sector of the Honduran economy when compared with countries in the region such as Mexico and Costa Rica. The sector provided gross dollar earnings in 2006 of $488m (€311m, £247m) compared with Costa Rica's 2007 earnings of $1.9bn. But the government has identified it as a growth sector.

Private developers and the Honduran government are investing more than $100m to build hotels, luxury villas and a golf course on a site a few miles to the west of Tela. The Los Micos development is part of an effort to bring international visitors to an area that contains a 25-mile stretch of pristine white beach, three national parks and one of the world's largest botanic gardens.

Environmentalists worry the project could put at risk extensive mangrove swamps and virgin rainforest and destroy the livelihoods of fishing villages occupied by Garifunas, an Afro-Caribbean ethnic group unique to this coastal region of Central America.

But the plan's backers insist it can work. Success will depend on selling the resort to wealthy travellers prepared to pay premium prices, guaranteeing high margins for operators.

That will limit the kind of mass beach-based tourism that tends to strain water and other resources and has proved environmentally damaging in resorts such as Cancún, which was built in the 1970s with extensive international backing on virgin land on the Caribbean coast of neighbouring Mexico. "We want a success story out of this," says Steven Stone, Honduran representative of the Inter-American Development Bank, which is backing the project.

He says a repetition of the controversial Cancún experience is definitely not on the cards. "It is especially important that the coastal eco-system and the fisheries stay protected. We want it to be a model to show the world."

Mr Stone says a local non-governmental organisation is being consulted at every stage of the process. In a bid to win their involvement, the government has also given leaders of the Garifuna community a 7 per cent shareholding in the company formed to develop infrastructure for the project. The combination of commercial and environmental objectives has taken time to evolve. Original plans to develop a low-key green project in the early 1990s proved commercially uninteresting to the private sector, says Roberto Martínez, tourism minister.

Critics remain concerned Los Micos could come at a heavy cost. Provision for a golf course worries environmentalists because such facilities are seen as water-intensive. Activists are concerned that property developers are already pressing the authorities to release more land from the national parks. There are also fears success will attract squatters, especially since job opportunities could attract migrants from rural areas.

Eduardo Zavala, director of Prolansate, a local NGO, says that within the past 18 months there have been three "significant" settlements in a protective buffer zone set up around the development.

"People are occupying land to gain the title and then sell to developers," he says.

Backers of the plan believe the challenges can be managed and hope, as Mr Aragón puts it, the development will put "Honduras on the map".

Even so, combining commercial and environmental objectives could stretch the planning capacity of Honduran institutions.