SAN DIEGO -- The federal government Thursday upheld the California Coastal Commission's rejection of six-lane Orange County toll road extension through San Onofre State Beach.

The decision from the U.S. Commerce Secretary upholds the state Coastal Commission's decision last February to reject completing state Route 241 from Rancho Santa Margarita to the south end of San Clemente, finding that the project was inconsistent with California law and threatened environmentally sensitive habitat.

The Foothill/Eastern Transportation Corridor Agency, the Irvine-based entity seeking to build the $875 million project, had appealed the Coastal Commission's decision to the federal government, arguing that the toll road is needed to alleviate traffic.

Surfers and parks advocates applauded today's decision, but said they expect the toll road agency to try to overturn the decision in court.

"This isn't a toll road through a state park, this is a toll road instead of a state park," said Joel Reynolds, an attorney with the Natural Resources Defense Council, and a member of the Save San Onofre Coalition.

In a statement, the agency called the federal finding "ludicrous" and a "terrible, bad decision for millions of Southern California commuters." The agency "vows to push forward" for the completion of the project, it said.

"The secretary's inexplicable decision is unsupported by the facts and rewards the anti-road and anti-growth obstructionists who have engaged in an orchestrated campaign of misrepresentation and distortion against the road's completion," the TCA stated.

The TCA said it will now review its options.

"We will take a hard look at the legal points in the decision and plan a strategy to overcome the secretary's inexplicably anti-commerce, anti-neighborhood decision and vow to push forward on a solution that will provide significant traffic relief while protecting Southern California's economy," the TCA's statement read.

Federal officials held a 10-hour hearing on the appeal at the Del Mar Fairgrounds in September, but a decision from Washington didn't come until Thursday.

In its written findings, the Commerce Department said it opposed the project under the federal Coastal Zone Management Act, which says the federal government can only override a state's rejection of a coastal development if no reasonable alternative to the project exists, or if the project is necessary for national security.

"The department determined that there is at least one reasonable alternative to the project," the ruling states. "The department also found that the project is not necessary in the interest of national security."

The TCA said the Commerce Department's decision was based on a "faulty conclusion on an erroneous and misguided view that there is an acceptable alternative."

The TCA argued that transportation agencies in California have "soundly rejected" alternatives to the state Route 241 extension.

Supporters of the project maintain that the toll road is needed to reduce traffic congestion in Orange County. They also tout the project's economic benefits through the creation of new jobs.

But NRDC's Reynolds said the toll road through a sycamore-shaded campground near the world-famous Trestles surfing beach would have been a disastrous threat to one of the last undeveloped beaches in Southern California.

"It would be destructive of recreational resources," Reynolds said. "It would be destructive of endangered species habitat. It would ensure pollution of our precious coastal environment, including the world-class surfing beach known as Trestles."

Environmentalists have said it would negatively impact the San Mateo Creek watershed and would set the bad precedent of opening up state park lands as future roadways.

Surfers, led by the Surfrider Foundation, asserted that the freeway would cause irreparable damage to San Onofre's surfing beaches.

The Surfrider Foundation's Stefanie Sekich described the TCA's toll road as an "egregious project."

She said the thousands of grass root opponents were the "tipping point" in the Commerce Department's decision.

"We're calling it a small victory and one step closer to finally seeing this toll road go away," Sekich said, adding that, unfortunately, the "battle is not over."

Elizabeth Goldstein, president of the California State Parks Foundation, also a member of the Save San Onofre Coalition, said she was "thrilled" with the federal government's ruling.

"They have upheld the California Coastal Commission decision today, dealing a fatal blow to this terrible project and an extraordinary victory to California," Goldstein said.

"This coalition has been working, some of us for up to ten years, to prevent San Onofre State Beach from being devastated by the proposed toll road which would run down its entire length taking approximately 60 percent of the state park," Goldstein said.

Both Goldstein and Reynolds said they expect the TCA to file litigation in federal court challenging the Department of Commerce's decision.