The old man remembers a better time when the wild rivers of Sarawak ran clear and fish were abundant, when the grand forests stretched across the vast interior of the island of Borneo, teeming with deer and boar, leopard and rhinoceros.

That was before the Japanese came up river in World War II in search of the retreating British, before the logging companies came to strip the ancient forests, and the government told people to leave their villages and ancestral lands to make way for the big dam.

Huvat Bagi sits on the banks of the Batang Rajang in central Sarawak and surveys his private apocalypse. Below the treacherous Murum rapids, the river slows to a turgid brown soup, thick with the silt of years of reckless logging upstream.

Every few minutes a truck heavy with logs careers down the mountain road showering dust. Across the water the village of Long Murum lies abandoned, the old long houses once home to more than 100 Kayan families crumbling and overgrown.

"Our life is so different now," says Mr Bagi, who is almost 70. "We are losing all our resources, all the things we depend on to survive are being destroyed. What will be left for us?"

Soon even these signs of ruin will be wiped away. In the next few years, if the Malaysian Government has its way, this entire area will vanish, submerged by the biggest hydro-electric project in South-East Asia.

A few kilometres downstream from Long Murum, a 210-metre-high wall will dam the river system that stretches back across Sarawak to the border with Indonesian Kalimantan. It will flood 700square kilometres of forest - bigger than the island of Singapore - to power a 2400- megawatt generating station.

The $A5billion Bakun dam project was stalled during the Asian economic crisis of the late 1990s, but recently revived by a federal government desperate to shore up its flagging political and economic fortunes. The dam will submerge 15 traditional forest communities and destroy the habitat of more than 100 endangered species of wildlife and innumerable exotic plants.

Already more than 9000 villagers have been forcibly moved to resettlement camps at Kampung Asap, a barren, logged-out district two hours away by road. There is nowhere to fish or hunt in the area, where the meagre compensation has mostly run out. Plantation jobs are the alternative to subsistence agriculture, and the restless young are fighting and trying amphetamines.

But some, like Mr Bagi, will not go quietly. At his village, Batu Kalo, five hours up river from Long Murum, he and dozens of other families have refused the government orders to move, and are digging in for a fight. Others are drifting back from the resettlement camps to join them.

"We don't want to be separated from the land where our people have been living all these generations," he says. "We have everything we need for our life here. We can grow rice, we have fish in the river and we can hunt in the forest.

"Already things are changing too fast for our people. Before the logging companies came, the rivers and the streams around this area where very clear. It was very easy to catch fish and the water was sweet to drink. Now many of the fish have disappeared, it is harder to catch them. In the old times the wild game was abundant, now the hunting has gone bad too."

Mr Bagi says life is impossible in the settlement camps, where everything costs money and people can not live traditionally. "Even if the government demands that we move, we will fight to stay here because if we are forced out that will be the finish for us. Our people won't survive the shock of this. The government should respect our choice and leave us alone."

It is a vain hope. While serious doubts remain about the economics and technical feasibility of the project - let alone its environmental consequences - the government says it is determined to proceed.

Already site works for the dam have left huge scars in the landscape at Bakun. A vast network of access roads, storage areas and construction camps has been carved out of the jungle. Despite repeated cave-ins and the rumored deaths of laborers, a Korean company is close to finishing work on the twin tunnels that will divert the river during construction of the dam, and eventually carry the water to drive the generation turbines. A new 120-kilometre sealed highway links Bakun with the coastal city of Bintulu.

Under the original plans, the electricity generated at Bakun was to be transported 670kilometres to the north-west coast of Sarawak by overhead power lines, then 600kilometres by submarine cable across the South China Sea to feed industries in peninsular Malaysia. Many international engineers have dismissed the plan as technically impossible.

Now the government says there will be no undersea cable, but the dam and power station will still be built to full capacity. While the projected power output is almost three times the state's present electricity consumption, officials talk vaguely about attracting new industries and selling power to neighboring Brunei and Kalimantan, which are already self-sufficient in energy.

The real reason for the revival of the project appears to be political. State elections are due in Sarawak this year. There are fears that a sharp decline in support for Mahathir Mohamad's United Malays National Organisation will spread to Sarawak. The ruling United Sarawak Bumiputra Party is aligned with the UMNO-led national coalition, and federal Energy Minister Leo Moggie is from Sarawak.

Abdul Taib Mahmud, Sarawak's Chief Minister for 20 years, has amassed a multi-billion-dollar fortune through his government's control of timber licences and his family's vast logging concessions. He also has a lot riding on the Bakun dam. The jobs and investment associated with the dam will help ensure his government's re-election and some of the biggest contracts will further enrich his family. The Taib family has a monopoly in the local cement trade, and the chief minister's sons are big shareholders in the company that has the rights to clear timber from the dam catchment area.

The Bakun project adds a final insult to a generation of environmental damage in Sarawak that has resulted in the devastation of an ecosystem regarded as second only to the Amazon. Three-quarters of Sarawak was originally covered with primary tropical rainforest - about nine million hectares of rich jungle. Today fewer than 500,000 hectares of primary forest remain, aside from a few national parks and reserves.

With more than 14million cubic metres of timber still being taken each year, international forestry experts estimate that Sarawak will be logged out in four to five years.

Uncontrolled and unsustainable logging practices have had a calamitous impact on the landscape. Loggers have bulldozed their way across the state taking all saleable trees, clear-felling vast areas, destroying the regenerative capability of areas that have been selectively logged, and even stripping the vulnerable high ground using helicopters.

Landslides triggered by logging hillsides and carving access roads through watercourses have created massive siltation. This has turned all the state's major river systems into muddy drains, seriously disrupted river and coastal navigation and flushed millions of tons of topsoil into the South China Sea.

The damage already done by the timber barons has compounded concerns about the viability of the Bakun Dam.

Strenuous efforts were made to hide details of the environmental impact of the project. Control of the cursory environmental impact process was transferred from federal to state authorities and all technical studies were initially classified under the Official Secrets Act. But copies of a detailed official study, carrying two serious warnings, were eventually made public in the early 1990s.

The 250-page report said that planned clear-felling of the dam site and logging of the catchment area would trigger soil erosion at a rate 500 times greater than in untouched forest. It said siltation would reduce the dam's capacity by 20per cent within 30years with, in the long term, the possibility of a dam collapse, with disastrous implications for communities living downstream.

The report also warned that a fault system in the area carried the risk of major earthquakes, a risk that would be compounded by the huge volume of water held back by the dam.

While the inability to secure international financial backing helped bring the project unstuck in the 1990s and may do so again, Dr Mahathir appears determined to go ahead even if it requires the government to underwrite borrowings.

The village people still living in the area are convinced that even if there is another postponement, it is inevitable that the dam will be built.

"I'm very sad about this. It is a great loss for us all," says Liau Anyie, head man of the Kenyah community at Long Lawan, another of the river villages that will be flooded. "We don't understand why this has happened to us. We were never asked to get involved. We never had a chance to express our concerns about this project. They just didn't care what we thought."