Demonstrations against the building of the new highway between Moscow and Saint Petersburg through Khimki forest had prompted President Dmitry Medvedev to postpone the project, in a rare nod by the state to popular pressure.

But Deputy Prime Minister Sergei Ivanov said the government commission tasked with investigating the project had after all given its green light to the plan.

The commission approved the building of the highway "taking into account all the factors -- transport, economic, social and legal," Ivanov, who headed the panel, said in comments broadcast on state television.

"We believe that from the judicial point of view the proposed route is completely legal," he said.

Ecologists had decried the project for destroying an ecologically important part of a sensitive forest area that is a haven for wildlife in the heavily built-up Moscow region.

Four billion rubles (130 million dollars) will be paid as compensation for the ecological damage to the Khimki forest outside Moscow, Ivanov added. Some 500 hectares (1,200 acres) of new forest will be planted to replace the 100 destroyed, he said.

Medvedev's suspension of the project had also prompted speculation that he was at odds on the issue with his powerful predecessor Prime Minister Vladimir Putin who is seen as a supporter of the Khimki route.

Protests against the highway grew in magnitude in recent months, culminating in a rare thousands-strong rally in central Moscow in August led by veteran Russian rocker and Kremlin critic Yury Shevchuk.

Shortly afterwards, Shevchuk was invited on stage by U2 lead singer Bono during a massive concert in Moscow in a high-profile gesture seen as giving the Irish rocker's backing to the protest movement.

But the lack of a proper motorway heading north out of Moscow to its international airport Sheremetyevo and further to Saint Petersburg had led to horrendous traffic congestion.

Ivanov said the idea of building the motorway -- one of whose main shareholders is the French construction giant Vinci -- was supported "by everyone".

He said that noise barriers would be built along the eight-kilometre (five-mile) stretch of highway through the forest and no additional infrastructure like shops would erected along the route.

"It will just be the road. Straight, like an arrow."

Transport Minister Igor Levitin said the road would be built by the end of 2013, Russian news agencies said.

Yevgenia Chirikova, the activist who spearheaded opposition to the project, said she was holding out for a last minute change of heart from Medvedev.

"This decision must be taken by the president and we do not want him to hide behind the back of Ivanov," she told AFP.

But in a low-key reaction from the Kremlin, Medvedev's spokeswoman Natalya Timakova said the president had been informed that the "road would use the previously agreed route".

"Any prominent projects touching the interests of citizens and ecology must be the subject of a dialogue between the authorities, business and civil society," she said according to Russian news agencies.

Several journalists and activists who addressed the issue have found themselves targets of attacks, including newspaper editor Mikhail Beketov who was left with brain damage after a brutal assault two years ago.

Beketov, confined to a wheelchair after the attack, is "very upset" by Tuesday's decision, his lawyer told the Interfax news agency.

Journalist for the Kommersant daily Oleg Kashin, who covered the issue, was savagely beaten in an attack in November that was condemned around the world. Activist Konstantin Fetisov was badly injured in an attack with a baseball bat in the same month.

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