Villagers are claiming victory after contractors have been told they cannot use explosives to route a gas pipeline through part of the Swansea Valley.
Neath Port Talbot Council referred the application to the DTI
The Department of Trade and Industry (DTI) has refused the National Grid permission to blast at Trebanos.
It said it shared residents' concerns that the route was too close to homes so the work should be done manually.
Meanwhile, protestors continue their 10-day occupation of the pipeline construction site near Trebanos.
The contractor, the National Grid, said it was "disappointed" and said it would mean a longer period of disruption.
In a letter to the National Grid, the DTI said the secretary of state had decided to "err on the side of caution" and took the view that while manual digging would take longer, the delay "would not threaten the transportation of gas from the LNG [liquefied natural gas] terminals at Milford Haven".
A fault line runs through the village and residents claimed blasting could cause land slides or structural damage to their homes.
The contractors will have to prepare the trench for the pipeline manually, with a process known as "pecking".
Rachel Evans, who organised a protest march against the pipeline last Saturday, said she welcomed the decision, although she still had concerns about safety.
She said: "I'm not convinced that the whole project is safe. But I'm delighted that blasting has been permanently halted because everybody can go to school today and go to work today knowing that their homes and their school are safe."
Local AM Gwenda Thomas said she: "I'm delighted that the DTI have come down on the side of the people in this case, and I pay tribute to the people of Trebanos for fighting such a vigorous campaign," she said.
Huw Evans, a Plaid Cymru councillor in Pontardawe, said the ruling showed "that local politics can work".
He said: "I honestly didn't expect this result and I think it is fantastic news for Trebanos and Pontardawe and it just shows that when people and communities do get together they can actually win."
He added he would want to learn more about pecking, or manual digging, and its effects.
He said: "I've never heard of "pecking" before and I will be looking at the detail. I welcome the fact that the blasting isn't happening, but let's look at the detail of the pecking because it's something that most people locally aren't probably expert in."
Neath MP and Welsh Secretary Peter Hain said residents had "expressed serious concerns" about the safety of the proposals because of former mine workings.
He said: "I wrote to Alistair Darling last month asking him to take these issues into account, and I believe he has reached the right decision."
A spokesperson for National Grid said: "We are disappointed with the decision as we believe the use of controlled explosive charges would have been a safe, quick and efficient way to complete the tunnel shaft.
"We will however be continuing with our mechanical works.
"There will now be a longer period of disruption for local people because the work will take longer using this process."