A Brazilian federal court gave the green light for construction of the controversial Belo Monte dam, ruling it will not directly affect any Amazon Indian communities.

The Brasilia-based court also rejected a challenge filed by federal prosecutors in Para state, who argued that the federal government violated the constitution by not consulting Indians prior to opening up bidding for concessions to build and operate the massive hydroelectric project.

Justice Maria do Carmo Cardoso, who cast the deciding vote on Wednesday, said the government acted lawfully by contacting Indians during the bidding process.

She ruled that, under Brazil's constitution, consultation prior to approval of a given project is required only if it will directly affect Indian communities.

A dozen suits have been filed in the Brazilian courts to block the project and the Inter-American Human Rights Commission is hearing a complaint that alleges irreparable damage to that slice of the Brazilian Amazon.

Construction of the dam - located on the Xingu River, which feeds the Amazon, and estimated to cost $10.6 billion - began in March outside the town of Altamira, Para state.

The 11.2 GW dam complex would be the world's third-largest after China's Three Gorges and Itaipu, jointly operated by Brazil and Paraguay.

Environmentalists and indigenous protesters say the dam will flood 516 sq. kilometers (200 sq. miles) of jungle, displace 50,000 people and cause severe damage to the local ecosystem.