Endesa Chile (END.SN) (EOC.N) (ELE.MC) claimed victory earlier this week in its bid to build the dam, saying Nicolasa Quintreman, one of the most prominent Pehuenche opponents of the project, signed over her land to the electric energy firm, which is majority owned by Spain's Endesa (ELE.MC).

Local newspapers say she will also receive payment of some $286,500. Quintreman, will receive another property of 77 hectares (190 acres) for her 3.1 hectare (7.66 acre) site, as well as social, technical and culture assistance to resettle, Endesa said.

Quintreman's decision has to be ratified by the state indigenous commission Conadi and Endesa still needs to acquire the land from the remaining five Indian families who have not yet signed.

"Nicolasa has informed us she has signed over her lands. This was a surprise for us because she didn't tell anybody beforehand, probably for fear that people would be angry with her," said Meulen Huencho, spokeswoman for Mapu Domiche Newen, the group that represents the remianing five families resisting the project.

The other 88 families have negotiated with the company to move to new plots higher up in the mountains.

Since the beginning of the project in 1999, Endesa Chile has faced fierce opposition from environmental groups and the 93 Pehuenche families whose homes on the river banks would be destroyed by the dam.

The Pehuenches claim that it is their ancestral right to stay in their homeland of forests and mountains, where they collect and live off the seeds that fall from the trees.

Environmentalist groups say that the building of the dam, which will involve flooding of 3,467 hectares (8,567 acres), will irreparably damage delicate forest and river ecosystems. They fear erosion of the banks of the huge Bio Bio river by the huge pressure of water from the turbines. The river is one of the best rivers for rafting in Chile.

Endesa Chile declined to comment on whether the end of Quintreman's protest would speed up construction of the 570 Megawatt dam, scheduled for completion in late 2003. Chile's government has welcomed the dam, saying it would bring much-needed new electrical capacity to the country.

Juan Pablo Orrego, one of the most vocal supporters of the Pehuenche's cause, told Reuters he was saddened that Quintreman had ended her protest.

"I'm saddened but I'm not surprised. I'm more surprised of how long she resisted the psychological and physical pressure. Nobody resisted like she did," he said.

Quintreman, 63, told local newspapers she reached an agreement with Endesa because she was tired of resisting, had never received any financial aid to help her cause and was worried about the health or her son.

"Our supporters abandoned me, we lost all our legal battles, what else do they expect? I never received any money to live on. They only came to visit me," she was quoted as saying.