Protest against a controversial rare earth refinery in Malaysia by Australian miner Lynas Corp intensified as more than 10,000 people rallied near the plant in Kuantan, the capital city of Malaysia's Pahang state on Sunday morning against the government's decision to grant the plant a temporary operating license.

The demonstrators consisted Kuantan residents, opposition members of the parliament and activists from several non- government organisations.

They chanted slogans and held placards that read "Stop Zombifying Malaysia" and "Lynas Leave Malaysia" at the peaceful rally on a field.

"I came here to support my friends and neighbours. My house is so close to the plant. I'm not afraid of Lynas. I don't understand why the Malaysian government accepts Lynas. They are given 12-year tax break by the government. What do we get?" Ponje, a retiree told Xinhua as he was overcome with emotion.

"We will protest until their license is revoked. We feel threatened, we don't want the plant because it has no use to us living here," Shamsiah Ismail, grandmother of five, said.

Also present at the rally was the country's opposition leader Anwar Ibrahim.

"We have stated our case in parliament... it's only a question of investment and money to enrich the few, it is important that we reassess. I'm appealing not only to the company concerned but also the Australian government, you reject the project why must you throw it here and ignore the plight of the Malaysians?" Anwar said.

Sunday's rally was the largest ever held since protests against the plant started over a year ago and the organiser of the rally, Himpunan Hijau (translates to Green Assembly in Bahasa) sent an ultimatum to the government.

"The power that we vested to them, they are not doing their moral duty to protect our children. So I want to make it clear that the power is in the people's hands, we want within 24 hours a decision to be made or else our Himpunan Hijau committee will immediately start off a bigger demonstration with bigger determination to make sure either we bring down Lynas or bring down this government," Himpunan Hijau Chairman Wong Tack said at the rally.

Environmentalists and Kuantan residents said the plant would generate radioactive waste that would contaminate the sea water and destroy the town's fishing industry, one of Kuantan's main sources of economy.

They had last week applied for judicial review at the court to halt the plant.

The government last month announced that it is granting Lynas a temporary operating license under five conditions, which include having Lynas submit plans for a permanent waste disposal facility and deposit a 50 million U.S. dollars financial guarantee with the government within the next 10 months.

The government has been repeatedly promising the people that it would scrutinise the 235 million U.S. dollars plant over the next two years before granting it a full operating license.

The government granted the company a manufacturing license two years ago with hopes that the rare earth processing plant would spur economic growth and provide jobs.

Operations at the plant were slated to begin last year but were put on hold following a public outcry that prompted the government to seek help from the International Atomic Energy Agency to review the plant.

The miner said on Tuesday that construction of the plant is 91 percent complete and that it would start production later this year.

The plant would produce metals worth five billion ringgit 91.66 billion U.S. dollars) a year that are used in making green products like wind turbine, LEDs and flat screen televisions.