The $16bn 11000 MW Belo Monte hydroelectric dam in Brazil has been suspended by order of a court decision, so as indigenous groups in the Amazonian region are properly consulted.
The Guardian reports it as an embarrassment for the Brazilian government who had attempted to rush the project through.
The decision on the Xingu River project in the Amazon, which is seen by the government as a crucial pillar in the drive to move away from fossil fuels, also represents a setback for developers, led by Electrobras, which now face expensive delays or daily fines of up to $266,00 per day if they do not comply with the court order.
The project has faced strong legal challenges and protests by conservationists and local tribes and Brazil's regional federal tribunal have accepted a lower court ruling that Congress acted illegally in authorising the dam without due consultation with the indigenous groups that might be affected.
Belo Monte will flood an area of 500 square kilometres along the Xingu and force the relocation of 16,000 people, according to the government. NGOs says the number of displaced may rise as high as 40,000. Opponents - including representatives of the Juruna, Arara and Xikrin tribes, as well as international conservation groups and celebrities such as Avatar director James Cameron and actress Sigourney Weaver - have welcomed the ruling.
The matter may not have concluded yet however as the Norte Energia consortium, which is building the dam, will have an opportunity to appeal, which they have done successfully in the past.
For more hydroelectric power news