Brazilian President Luiz Inacio Lula da Silva signed his approval for a huge new hydroelectric dam that is set to be more controversial than China's Three Gorges Dam, which it will surpass in size and volume when completed in 2015.

Lula gave the go-ahead for the Amazonian dam in the midst of a heated election campaign for the October presidential election his Workers Party nominee Dilma Rousseff is widely tipped to win.

Lula's approval for the dam relieved the incoming president of a potentially embarrassing confrontation with vociferous environmental, Indian and religious campaigners who argue the Belo Monte hydroelectric project on the mouth of the Xingu River will devastate vast regions in the Amazonian state of Para.

The dam will also displace 50,000 indigenous inhabitants, who are poorly represented in the Brazilian political mainstream, and irreversibly play havoc with flora and fauna of the region.

Lula said the revised blueprint for the dam would be less aggressive in its impact on the environment and promised adequate compensation for the communities facing ruin.

In a bid to mollify critics, Lula aides said the construction over the next four years will create 20,000 jobs and transport the region into the 21st century. Environmentalist backers say the Amazonian communities want none of that, and would prefer to have development without the dam.

In April, "Avatar" director James Cameron and two members of the film's cast, Sigourney Weaver and Joel David Moore, took part in marches in Brasilia to support grassroots groups that oppose construction of the dam complex.

With Lula's signature firmly fixed on the deal, the die is cast, however. A consortium of 18 companies and investment and pension funds will have rights to exploit the river's hydroelectric potential for 35 years.

Whether the project includes jobs for the local inhabitants facing eviction and how the damming of the water will affect the river downstream remains unclear, but critics warn of an impending human tragedy and huge losses to the ecology of a vast area in northern Brazil.

Silva Telles of the Instituto Socioambiental non-governmental organization said the dam poses a direct threat to two tribes that subsisted on the river's resources. He said once completed the dam will dry up about 80 miles of the Xingu River, "which holds three times as many species as the whole of Europe."

About 56 environmental, social and religious organizations joined a letter campaign warning the dam will be a "death sentence" for the Xingu.

"International agreements are being violated, like Convention 169 of the World Labor Organization, the United Nations' Declaration on the Rights of Indigenous Peoples and the Convention on Biological Diversity," the letter said. The letter followed about 15 lawsuits challenging the Environment Ministry over the project.

When fully operational the plant will have the capacity to generate 11,233 megawatts of electricity.

Analysts said the current estimated cost, $11 billion, was likely to be exceeded before the project goes on stream. It is the largest project in Lula's infrastructural development program but also the most controversial.

Critics said Brazil, currently on a winning streak with a booming economy, would likely exhaust the dam's capacity in the foreseeable future with the current level of unplanned urban growth, a huge amount of waste or inappropriate use of electricity.

Brazil already operates another gigantic dam, the Itaipu complex on the Parana River, which it shares with Paraguay.?Brazil's landlocked neighbor has been trying to get more of Itaipu electricity deployed for its modernization but is hampered by inadequate transmission facilities.

Before the dam becomes a reality, however, Lula will be gone at the end of his two terms after this year's election and the task of dealing with the environmental and human-rights issues raised by the project will be left to his successor.

Critics said the Bel Monte project fulfills Lula's desire, first expressed in an interview in 2007, to reach the end of his term "in a strong position in order to influence the succession."