Laos has halted plans for new hotels in the town centre of the ancient royal capital Luang Prabang after receiving a warning from UNESCO about its World Heritage status, media reported Tuesday.

The city's heritage office chief, Manivone Thoummabouth, said the provincial government had decided not to allow foreign investors to turn any more state buildings into hotels, the Vientiane Times reported online.

"There are many hotels in the city and if more are built, the area would be too crowded with tourists, causing difficulty for state officials to access their workplaces," she was quoted as saying by the daily.

The 700-year-old former capital, seen as the jewel of ancient Lao heritage, is a Mekong river town of glistening Buddhist temples and palm-shaded French colonial mansions that draws hundreds of thousands of tourists a year.