BILLINGS, Mont. - Federal officials said Thursday that dozens of oil and gas leases in Montana will be withdrawn from auction and pledged to look more closely at the environmental consequences of such development, particularly near the Charles M. Russell National Wildlife Refuge.

The announcement followed vocal opposition from conservation groups and state officials who claimed the government's pro-energy policies threaten wildlife populations.

"It's a huge step if they're willing to do things differently," said T.O. Smith, energy coordinator for the Montana Department of Fish Wildlife and Parks.

A petroleum industry representative, Dave Galt, warned the BLM's action could "complicate development of resources in the Rocky Mountain West."

At issue are the effects of increased drilling under the Bush administration on public lands stretching from Montana to New Mexico. In deferring the lease sales, the Bureau of Land Management pledged to consider whether additional industry restrictions are needed in light of emerging wildlife research from the University of Wyoming and the University of Montana.

Recent studies have tied intensive oil and gas development to sharp declines in game species including mule deer and sage grouse. Energy companies contend there is not enough proof of declines to draw definitive conclusions.

The withdrawal covers all or parts of 96 parcels with dense sage grouse populations in Garfield, McCone and Carbon counties. Most of the leases are just south of the Russell wildlife refuge.

Sage grouse, a chicken-sized ground bird, has been considered for protection under the Endangered Species Act. Environmentalists are trying to force a listing of the bird through a pending federal lawsuit. If successful, that could hobble development of some of the West's most prosperous oil and gas fields.

The Montana leases had been slated for sale at a July 31 public auction.

"We want to take a look to see if what we're doing is adequate (to protect grouse) or if we need to make some course corrections in what we're doing," said BLM spokesman Greg Albright. Sales will continue on 101 parcels covering 263,400 acres in Montana and North Dakota.

He declined to provide a timeline for the review of the deferred parcels and said the withdrawal was "indefinite."

Critics said the BLM retreated from the sales only because it was "caught" pushing a Bush administration energy agenda that favors oil and gas development over protections for wildlife and other natural resources. They said the agency would not have acted absent prodding from the Montana wildlife officials and several conservation groups.

"This typifies the Bush administration's approach. They'll try to get away with issuing leases unless somebody calls them on it," said Dave Alberswerth, a BLM policy expert with The Wilderness Society in Washington, D.C.

But Smith welcomed the withdrawal as a "step in the right direction."

The BLM rebuffed two prior requests from the state to slow or reduce oil and gas exploration. The withdrawal follows several weeks of negotiations between BLM and Montana Fish Wildlife and Parks.

Smith said continued coordination between the state and federal agencies would allow development to continue in Montana at a sustainable, albeit slower, pace.

"We're not asking them to stop industry from doing anything. We're just asking them to hold up until we can work this out," he said.

Representative of the petroleum industry said the lease withdrawal could dampen interest in central Montana's oil and gas reserves. Galt, with the Montana Petroleum Association said it also could cost the state and federal government significant royalty payments that would have been made on future oil or gas production.

Galt accused the BLM of reacting to a rising "hysteria" over grouse that's not necessarily borne out by the facts. He said more studies are needed before the agency is justified in shutting down large areas to drilling.

The leases in question were in "wildcat country" with little prior oil and gas exploration, said Tom Richmond, administrator of the Montana Oil and Gas Conservation Board.

Sage grouse have been in decline across the west for several decades due to suburbanization, development of land for agriculture and avian diseases such as West Nile virus. Only in recent years has oil and gas development become a significant threat to the bird, according to the U.S. Fish and Wildlife Service. But researchers say it has fast eclipsed other factors.

Grouse need vast swaths of undisturbed sage brush to thrive. In northeast and western Wyoming, southeast Montana, northern Utah and western Colorado, those swaths increasingly are crisscrossed by service roads leading to gas fields.

Some companies spend tens of millions of dollars rerouting power lines and roads to avoid sage grouse concentrations and shut down drilling for months at a time during breeding season. Such measures are not universal, however.

"We certainly want to be responsible, but we also certainly want to develop the resources," Galt said.