A Chinese property tycoon is one step closer to getting Icelandic approval for his plans to buy a large swathe of land for a tourist resort, an economic affairs ministry memo released Thursday showed.

The ministry said it was favourable to Huang Nubo's plans in its memo to the interior ministry, which will make the final decision.

"The ministry of economic affairs sees no reason to believe that Iceland's interests are in any way threatened by the foreign investment in question," Economic Affairs Minister Arni Pall Arnason wrote in a memo to Interior Minister Ogmundur Jonasson.

"On the contrary it is important in view of long term general interests to encourage foreign investment," Arnason said.

It is not yet known when Jonasson will announce his decision.

Huang Nubo asked the Icelandic government in late August for permission to buy 300 square kilometres (200 square miles) of Icelandic wilderness to build a resort, since the land is partly owned by the government and approval is required for a non-resident of the European Economic Area to buy land.

Huang has offered to buy the land, known as Grimsstadir a Fjoellum, for $10 million and wants to invest about $200 million (147 million euros).

Iceland's Interior Minister Oegmundur Jonasson has said he would scrutinise the application carefully.

Jonasson insisted the land "is not up for sale simply because a high price is being offered."

Huang has said he wants to build a luxury resort with a hotel, golf course and sports facilities, and Europe's biggest nature reserve.

Icelandic observers have suggested that Huang's purchase could help Beijing get a foothold in the Arctic region, as the melting ice cap means lucrative oil and gas deposits under the seabed could soon become accessible and shorter shipping routes open up.