A federal court in Brazil has ordered the suspension of work on the huge Belo Monte hydro-electric dam in the Amazon, the third largest dam in the world, a court official said.

The official said the regional federal court ruled yesterday that the construction of the dam across the Xingu River should be immediately suspended pending a congressional hearing at which the area’s indigenous people would be heard.

The court noted that when Congress approved the project in 2005, it called for an environmental impact study after the start of the work.

Under the law, the native communities were given the right to air their views in Congress on the basis of that environmental impact study, but this was not done, the court said.

It noted that the Norte Energia consortium in charge of the project will be able to appeal the decision to a higher court.

Norte Energia told AFP it was awaiting formal notification of the court ruling before responding.

The court said the consortium was liable for a daily fine of $ 250,000 should it flout the order.

Work began a year ago, despite fierce opposition from local people and green activists.

Indigenous groups fear the dam will harm their way of life while environmentalists have warned of deforestation, greenhouse-gas emissions and irreparable damage to the ecosystem.

Belo Monte is expected to flood an area of 500 square kilometers along the Xingu and displace 16,000 people, according to the government, although some NGOs put the number at 40,000 displaced.

The federal government plans to invest a total $ 1.2 billion to assist the displaced, by the time the dam is completed in 2019.

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