By Gary Duffy
BBC News, Sao Paulo
Brazil has given the initial go-ahead for the construction of two hydro-electric dams to be built on the longest tributary of the Amazon River.
President Lula wants to avoid a repetition of the power cuts of 2001
The Madeira River projects have divided opinion even within government and in recent years have been one of the most environmentally sensitive issues.
The river is said to have one of the most diverse fish stocks in the world.
Environmentalists fear they could be threatened by the development of the dams costing billions of dollars.
Such have been the sensitivities surrounding this decision that Brazil's environmental agency Ibama took two years to reach this initial conclusion and even now has attached 33 conditions to the project.
The project still needs final approval before any work can go ahead.
Development v environment
The intense debate, both inside and outside government, summed up the challenge in Brazil to reconcile the ambitions of a developing country alongside the need to protect the environment.
Brazil suffered extensive power cuts in 2001 and President Luiz Inacio Lula da Silva was determined this was an episode that would not be repeated.
The government believes the two dams, when built, could supply around 8% to 10% of the national demand for electricity.
Critics fear it will cause damage to the Amazon area by disturbing the flow of sediments in the Madeira River, as well as bringing thousands of workers and their families to an area where resources are already overstretched.
There are also worries that the construction would stir up mercury levels in the river and one of the conditions attached to the project is that this should be carefully monitored.
Thousands of families also depend on the river for their income and the impact on their lives could be significant.
The government says the environmental consequences will be minimised by the conditions attached to the proposed dams.