By Steve Kingstone

The environment ministry said 26,000 sq km of forest were chopped down in the 12 months prior to August 2004.

The figure is the second highest on record, 6% higher than the previous 12 months.

Deforestation was worst in the state of Mato Grosso where vast swathes of land have been cleared to grow crops.

The loss of 26,000 sq km means almost a fifth of the entire Amazon has now been cleared.

Click here for annual deforestation figures

On this occasion, just under half of the deforestation occurred in Mato Grosso, where trees have been replaced with soya fields.

Last year, exports of soya, mostly to China and Europe, propelled Brazil to a record trade surplus. But campaigners say exports are being put ahead of the environment.

In a statement, Greenpeace called the governor of Mato Grosso the "king of deforestation".

He himself is one of the world's largest soya producers.

Responding to the figures, the government points out that it has increased satellite surveillance of threatened areas and created some of the largest environmental reserves in Brazilian history; but so far there is little to show for it.

The broader fear among environmentalists is that a shrinking Amazon will soon become a net polluter of greenhouse gases such as carbon dioxide as its absorbing properties are reduced and more and more felled trees are burned.