Vietnam celebrates after winning the bid to host 18th Asian Games in 2019, the 2012 file photo. [Photo/CRI]

HANOI, Vietnam - Vietnam has withdrawn as the host of the 2019 Asian Games, saying it lacked funds and the country's reputation could be at risk if things don't go smoothly.

In a statement late Thursday, the government said hosting the event in Hanoi was unjustifiably expensive.

"Hosting this could help us promote the country's image and position. However if the hosting is not properly and successfully prepared, it will have the opposite effect," the statement said.

"State budget is limited and must be prioritized for other immediate tasks."

All major local newspapers on Friday ran front-page headlines praising Prime Minister Nguyen Tan Dung's decision.

"A decision that wins the heart of the people," was the front page headline of the widely read Tuoi Tre (Youth) newspaper.

"The whole country welcomes the right decision of the prime minister," reader Do Quang Dan wrote to Tuoi Tre. "The country has many things to worry about. Listening to people's voices is a precious thing for the people to trust in the head of the government, and once there's a trust of the people all difficulties will be overcome."

However, Hoang Vinh Giang, deputy chairman of Vietnam Olympic Committee, was disappointed by the withdrawal.

"It's very regretted that Vietnam withdraws from hosting the games," Giang told the Associated Press by telephone "This is a very good opportunity, I don't know when Vietnam will have another chance to host."

The sports ministry had budgeted $150 million for the event, but economists said the bill could be several times higher, and in line with spending levels for this year's Asian Games in Incheon, South Korea, which could reportedly top $1 billion.

The Vietnamese government's initial decision to host the games had generated domestic opposition in the media and on blogs, as the country was still struggling to emerge from the global financial crisis.

There was no immediate reaction from the Olympic Council of Asia, which organizes the event. The OCA website still had Hanoi scheduled as the 2019 host, with a video promoting the event.

The OCA will have to quickly decide on a replacement host, though it does have the benefit of an extra year as Hanoi was to have been the first games of a new schedule that would put the event the year ahead of the Summer Olympics.

Surabaya, Indonesia, had been the other serious bidder for 2019, while Dubai, United Arab Emirates, expressed initial interest but withdrew.

The Asian Games features similar events to the Summer Olympics but also include sports popular in Asia. More than 40 nations take part.