The government has already been under fire for the treatment of Indians

A battle for land with another tribe of Indians led to more than two-thirds of the community being killed.

Brazil's Regional Federal Tribunal ruled the government should pay nearly 1m reals ($550,000) for the distress they caused by relocating the north-western tribe, south to the Xingu National park to make way for the Transamazonica interstate road.

Illness

The government had made the decision in the 1970s to move the tribe after the community started getting ill.

Members of the tribe contracted pneumonia and tuberculosis when they came into contact with people using the road.

Social problems such as alcoholism and prostitution were also seen in the community for the first time.

When the Panaras, whose name means "big men" arrived at Xingu they were confronted by the Caiapos and had to move eight times in the 20 years they spent in the park.

At one stage their population declined from almost 300 to 79.

In 1996, the Panaras plight was recognised by the government and they were helped to return to their ancestral home.

The tribe is now numbers around 200.

The compensation announced on Thursday is to give the tribe's people a wage aimed at giving them a chance to regain their moral and material status.