A Brazilian judge has cancelled the tender process for construction of the world's third biggest hydroelectric dam in the Amazon jungle and suspended a preliminary license issued for the site.

In his decision, handed down late Wednesday, Judge Antonio Almeida Campel upheld a request from the Federal Public Ministry in Para state seeking to have authorizations to build the Belo Monte dam on the Xingu River withdrawn.

The dam's hydroelectric production capacity of 11,000 megawatts would come at the cost of submerging some 500 square kilometers (193 square miles) of land and would "require excavations equivalent to the work needed to build the Panama Canal," according to the Public Ministry.

Campel told Brazil's Institute of the Environment not to deliver a new license for the dam and ordered the National Energy Agency to halt next Tuesday's call for tenders for the contract to build the dam or face a 570,000 dollar fine for "environmental crimes."

"The Belo Monte hydroelectric dam will exploit hydro-energy in areas occupied by indigenous people who will be directly affected by the construction and development of the project," the judge said in his decision, which is subject to appeal.

Belo Monte would be the second biggest dam in Brazil and the third biggest in the world, behind the 14,000 megawatt capacity Itaipu dam in southern Brazil and the massive Three Gorges dam in China, which has a capacity of 18,000 megawatts.

A host of Hollywood stars had joined forces to block the dam, including US actress Sigourney Weaver.

"The judge threw out the auction that was supposed to happen and said there were too many irregularities and that they had probably broken some laws, and really they needed to start over with a process that deals more ethically with the communities on the river," Weaver told AFP in Washington.

"It's great that the judge did it, but it only gave us more time to keep organizing."

She called the dam "a 19th century idea" in a country with "so many solar and wind opportunities."

And she added that she had joined the protest movement after "hearing these tribal chieftains talking about their grandchildren, how the way of life that they've lived for centuries will disappear on a whole section of the Amazon."

James Cameron, director of the blockbuster movie with an environmental message "Avatar," which stars Weaver, also celebrated the development.

"We were jubilant because this was a big victory in a symbolic case and we now have time to help build global and local awareness that Brazil needs a sustainable vision and a different energy policy," Cameron said in Washington Thursday.

"We were jubilant when the bidding process was suspended, but it will probably return," he said.

Cameron was in Brazil on Monday to urge President Luiz Inacio Lula da Silva to stop construction of the dam.

"I would challenge him to be a hero" by halting work on the project, Cameron told a press conference in Brasilia alongside Weaver.

Cameron, along with pop singer Sting, environmentalists and the native Brazilians who live on the banks of the Xingu River, believes the dam approved in February by the Brazilian environment ministry would pose a severe threat to the environment.

burs/sah