"Without a doubt, it's a victory for Brazil, its international image, human rights and the Indian people," Marcio Meira, chairman of Funai, the government agency for
indigenous affairs, said.
Supporters see the ruling as a confirmation of land rights that Brazil's indigenous groups were granted in the 1988 constitution.
'Obstacle to growth'
Critics say the reserve, with an area the size of Kuwait, is too big for the 19,000 Indians who will have the sole right to live there and work the land.
Some mining, timber and agriculture businesses say it is an obstacle to growth.
Rice farmers who settled on the land before it became a reserve and who will now be expelled, mocked the decision.
"This is ridiculous, they're voting against progress," one of them said.
|Not all Indians are happy with the court ruling [Reuters]
A land dispute has raged since the 1970s between Indians and businesses who seek to use the land for farming and mining.
Farmers clashed with Indians on several occasions last year.
Some Indians who wanted their towns excluded from the reserve for fear they would be cut off from modernity, were not happy with the court's decision.
"We want to continue doing business with the white man. They want us to be primitive Indians, but we're civilised," Caetano Raposa, 65, who travelled 2,700km from the reserve to hear the ruling, said.
Others warned that a single reserve could not accommodate rival Indians of the same ethnicity, driven apart over decades by outsiders.
"The church, settlers, NGOs [non-governmental organisations] - they all divided our people," Abel Barbosa, a Macuxi Indian from the town of Flechao, said.
"There will be more blood shed in that land."
Brazil, the largest country in South America, has set aside 12 per cent of its territory for reserves for native groups whose ancestors lived in the country before the arrival of Europeans around 500 years ago.
The indigenous population was decimated by the arrival of Portuguese settlers, notably as a result of diseases the immigrants brought with them, such as tuberculosis, against which tribal groups had no defence.
According to Funai, their number has decreased from 10 million to 460,000. The total population of Brazil is 190 million people.