About 1,000 Vietnamese Catholics held a prayer vigil after evening mass Saturday to protest the project on land that the Tai Ha Redemptorist parish church claims to have owned since 1928.
Foreign Ministry spokesman Le Dung said Tuesday that the Hanoi People's Committee has asked agencies to "stop the implementation of the project and construction works on the land of the Ba Giang lake."
The committee had also asked the Dong Da and the Quang Trung district authorities to "strengthen their land management activity, maintaining the present situation, preventing further occupation and ensuring security and discipline in the area."
A priest, Nguyen Van Khai, told AFP on Friday that a school was already erected on the land, and work had recently began on another building. A construction hoarding has gone up indicating that a residential block will be built there.
The church had already complained last year about construction projects on property it says was seized by the communist regime.
During Saturday's vigil, the protesters also denounced a controversial bauxite mining project in central Vietnam.
By criticising the bauxite plan, the Catholics join a diverse collection of scientists and intellectuals opposed to the mining project.
They say the environmental and social damage of the mine will far outweigh any economic benefit and cite worries about safety because a Chinese company has been granted a contract to build one of the mines.
The foreign ministry spokesman dismissed the parish's criticism, saying it "provided inaccurate information, touching upon non-religious issues, slandering the regime, distorting the truth and undermining national unity."
Vietnam has Southeast Asia's second largest Catholic community after the Philippines, with at least six million followers.
Religious activity remains under state control, but Hanoi's relations with the Catholic Church had improved before the wave of property protests.
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