Sri Lanka said on Wednesday it would allow rich individuals and temples to adopt baby elephants, overturning a ban put in place to protect the animals.
Elephants are revered as holy in mainly Buddhist Sri Lanka, where the high-maintenance beasts have become a status symbol for the wealthy elite.
But they are also kept by temples for use in religious ceremonies, and the ban had led to worries there would not be enough tame elephants for Buddhist pageants.
"Wildlife conservation is good, but we also need to conserve our cultural pageants," said government spokesman Rajitha Senaratne after the cabinet overturned a ban on adoptions.
Senaratne said the government decision had been motivated partly by overcrowding at Pinnawala, which was set up as an elephant orphanage and now runs a successful breeding programme.
He said strict conditions would be put in place to ensure the animal's welfare. Individuals would have to pay 10mn rupees ($66,000)for an elephant, while temples would get them for free.
But there has been controversy over the separation of elephant calves whose parents are still alive.
Earlier this month a group of wildlife enthusiasts went to court to stop an elephant calf given to New Zealand during a visit by the then prime minister John Key from being taken away from its mother.
Buddhist monk Omalpe Sobitha said Nandi, six, should not be separated from her parents, who were both still living at Pinnawala.
Last year, Sri Lanka unveiled tougher laws, including a ban on using young elephants for logging and other physical work, as part of a crackdown on cruelty to animals.
Capturing wild elephants is illegal in Sri Lanka where official records show there are about 200 domesticated elephants. The population in the wild is estimated at about 7,500.