The Hong Kong government has decided to reclaim the HK$2 million (US$257,600) it donated to an earthquake-devastated city in Sichuan Province after local authorities pulled down a school built with its aid money.

Stephen Lam, chief secretary of the administration of Hong Kong, said the city of Mianyang did not inform Hong Kong before it dismantled the school.

He went to Sichuan Province on Thursday and said Hong Kong will allocate the returned money to other reconstruction projects in Sichuan.

"Hong Kong has provided aid to Sichuan for 123 reconstruction projects and the remaining ones will be completed this year," Xinhua news agency cited Lam as saying.

The Hong Kong government has donated HK$9 billion in total to aid Sichuan's reconstruction.

The Sichuan provincial government said it respected Hong Kong's decision and will conduct an investigation into what it called the unauthorized demolition in Mianyang.

Mianyang authorities blamed Wanda Commercial Prosperities Co Ltd for tearing down the Zijing Ethnic Minorities High School to make room for its massive real estate project.

However, a statement issued by the Mianyang government on Monday said the school was torn down for safety concerns because the school building was leaning after recent heavy rains.

Wang Jianlin, a Wanda executive, dismissed the unauthorized demolition, claiming the practice had nothing to do with Wanda.

"We hadn't planned to bid for the land in Mianyang before the demolition was finished, but local authorities invited us to start a project. They promised 'everything was okay,' but problems occurred once we got the land-use right," he said.