Legend of the sword in the lake halts plans to build huge dam in Manipur

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North-east India's equivalent of King Arthur has ridden to the rescue of thousands of people opposing a massive dam project that will flood their homes.

The Indian Prime Minister, Manmohan Singh, cancelled plans to lay the foundation stone for the dam this weekend in the face of massive protests by tribal groups who say it will inundate the sacred lake still believed to hold the region's answer to Excalibur.

Manipur, the state where the dam is supposed to be built, lies in India's impoverished and insurgency-racked north-east, and is home to tribal groups who have their own distinct culture. Now that culture has brought a major project to build a 520ft hydroelectric dam to a standstill.

Manipur's tribal people say the dam will destroy the lake where the sword of one of their greatest heroes, Jadonang, is believed to lie. It will also submerge an island called Thiledam, meaning "Life and Death", where they believe the souls of the dead rest, an echo of the isle of Avalon, the supposed resting place of King Arthur.

The Tipaimukh dam will also flood 60 villages and displace 40,000 people. But local beliefs have galvanised opposition far beyond those directly affected, and tribal groups had called for a 24-hour strike and blocked roads across the state.

Government officials say the project to dam the Barak river would guarantee electricity for the state and bring in a billion rupees (£11.3m) a year from power sales. In a state where mass unemployment has fuelled several insurgencies, it could create 4,000 construction jobs.

But the troubles facing Manipur are not so easy to solve. Like most of the seven states in north-east India, the so-called "Seven Sisters", it is facing insurgencies by indigenous peoples who feel they have little or no stake in India, and that their affairs are dominated by far-off Delhi. At least 20,000 people have died in the violence since the Sixties.

Against this backdrop, forcing 40,000 indigenous people from their homes and flooding an area of cultural significance was always going to be difficult.

"The project has to be dropped as we will not allow anyone to ride roughshod over tribal sentiments linked to our land, culture, livelihood and identity," Kinderson Pamei, of the Action Committee Against Tipaimukh Project, told reporters.

By forcing Mr Singh to cancel his visit, protesters have been more successful than the groups opposing the Narmada dam project in western India. The controversy over the Narmada project, a series of dams which will force hundreds of thousands of people from their homes, has come to embody the protest movement of modern India, but has had little success.

Mr Singh's office said that given the scale of opposition he had changed his plans to travel to the state.