"It is still an absolutely scandalous figure," said Paulo Adario, Amazon campaign coordinator with Greenpeace.

That figure was down from a revised 10,500 square miles (27,200 square km) during the same period a year earlier.

It is the first reduction in the deforestation rate since 2000-2001 and the largest since the 1995-96 period, when the rate fell 37 percent from a high of 11,216 square miles (29,050 square km). An Inpe official said the definitive rate for the 2004-05 season would vary by no more than 5 percent.

The government has been eager to announce a success story after poor third quarter economic growth figures came out last week and President Luiz Inacio Lula da Silva's popularity ratings fell to a low last month. But environmentalists were not so cheered by the figures.

Adario said one-time government policing explained much of the improvement. He cited strong Army presence in the northeastern Para state after Sister Dorothy Stang, a champion of the poor and the environment, was slain in February by gunmen. Her assassination drew renewed international attention to the destruction of the Amazon forest.

US and Brazilian forest experts said in October that damage to the Amazon may be twice as large as previously thought due to undetected "selective" logging, where individual trees are picked out of the forest.

They said that taking into account selective logging, damage was between 60 percent and 128 percent higher than the officially deforested area between 1999 and 2002.

Government officials said on Monday increased control and prevention had been the key to slowing the rate of destruction.

"Our big advance this year was deterrence," said Joao Paulo Capobianco, head of forestry and bio-diversity at the Environment Ministry.

Some of the largest reduction in deforestation came in the region of Para state where the government created additional forest reserves and deployed army troops in the wake of Sister Stang's slaying, Inpe maps showed.

Other environmentalists say lower soybean prices meant farmers had less incentive to push deeper into the forest.

"Any reduction of deforestation is good news but it is too early to tell whether the rates will continue falling," said Mauro Armelin, public policy coordinator with World Wildlife Fund in Brasilia.

Armelin called on the government to commit publicly to a long-term deforestation target.

"We don't know what the objective of public policies are," Armelin said. "Do they want eliminate deforestation or simply reduce it?"

Environment Minister Marina Silva also adopted a cautious tone.

"Our big challenge now is to make sure that these results are constant and that [government] action is not only seasonal," she said.