BEIJING - A Chinese real estate company has revived its ambitious plan to open an idyllic ranch in Iceland since Reykjavik has given the company the green light to rent, but not purchase, land there.

The Beijing Zhongkun Investment Group met with controversy last year when it sought to buy a piece of land covering 30,639 hectares on the north shore of Iceland but was rejected by Iceland's Ministry of the Interior, which cited legal restrictions on foreign entities buying land in Iceland.

"We have been notified that the Icelandic government has approved a new proposal to develop the resort on a land lease," Yao Chen, a company spokeswoman, said Tuesday. "But as the negotiation for a contract is still on, no more details are available at this moment."

Yao said the company welcomed Reykjavik's decision and is working to secure a long-term lease, hopefully one good for 99 years, for the same patch of land it originally intended to buy.

"We need about 10 or maybe 20 years to develop the resort well, so a short-term land lease may not fit," Yao said.

She said the company's chairman Huang Nubo chose to develop a resort in Iceland because he considers Northern Europe an ideal region for tourism as it is free of conflicts and over-investment.

Huang also has a personal connection with Iceland, Yao added. The real estate tycoon once shared a room with an Icelandic student when they were both studying at Peking University in their 20s.

The two were on good terms, and Huang even received a sweater hand-knitted and sent by his roommate's mother, Yao said. Huang was very much impressed by Iceland's breathtaking landscape during his first visit there and set up a 1 million US dollar fund for Iceland-China poetry exchanges.

Huang had originally planned to invest $200 million in the Iceland resort, including $8 million for the land purchase. Yao said leasing the land will help the company cut costs.

Zhongkun is also developing a sprawling eco-resort in a forest-covered county in southwest China's Yunnan Province, estimated to involve a whopping 50 billion yuan ($8 billion ), local media reported earlier. But sources said the amount will not come solely from Zhongkun.