Brazilian President Luiz Inacio Lula da Silva on Thursday threw his weight behind a controversial dam project which has drawn fierce opposition for threatening Amazon tribes and wildlife.

Lula said the Belo Monte hydroelectric project was necessary to lift Brazil's energy output in the 21st century.

He also said 1.9 billion dollars of the 11.2-billion-dollar cost of the dam was going to allay the environmental impact and to help indigenous communities and other locals who will be displaced when a swath of the Amazon is flooded.

Environmentalists and Amazon Indian tribes have decried what they say will be massive destruction of Brazilian fauna and flora in the area.

However tribal protesters said Thursday that they will postpone plans to build a village on the projected dam site to stop construction, as they had threatened, and will instead meet with officials from the government electricity consortium and other Indian leaders.

Xikrin tribe members, who were heading out on boats to begin the protest occupation, instead first stopped in the town of Altamira "to talk directly" with representatives of the local state power company, chief Luiz Xipaya told AFP.

The protest occupation will depend on the results of Altamira talks, Xipaya said.

In his press conference, Lula said he was unconcerned by reports that some foreign companies could back out of the project, saying that state enterprises could pick up the slack.

"A country that wants to be the fifth-biggest economy on the planet within the next decade... needs to think five years ahead, and that is why we are doing this," Lula told reporters.

Lula also said that there are two other Amazon-region hydroelectric dams already being built, and that yet another one could be announced soon.

The dam would be the third-largest in the world after China's Three Gorges facility and Brazil's Itaipu dam in the south on the border with Paraguay.

Hollywood director James Cameron and actress Sigourney Weaver have lent their fame to the fight to stop the dam, drawing parallels between the natives' fight against the project and the theme of their blockbuster movie "Avatar."