The government has shelved plans to build an underground car park at Palace Square in Valletta.

The decision was taken after tunnels found beneath the square were deemed as having historic value by the Superintendence of National Heritage.

It is the second reversal of plans for an underground project in Valletta in a matter of weeks after the government and the Church jointly asked their representatives on the St John's Co-Cathedral Foundation to drop plans for the underground extension of the cathedral museum. The application to MEPA was formally withdrawn on Monday.

The government still intends to embellish Palace Square. Resources Minister George Pullicino said the project will include the installation of a fountain and paving.

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