A Brazilian airline has agreed to pay £1m to an indigenous tribe to compensate for the damage caused by a plane crash in 2006.

A Gol aircraft was on a commercial flight when it collided with a private jet in mid-air in September 2006 above the Caiapó indigenous reserve.

The Caiapó tribe refused to go back to the area where the debris fell. They say it is now polluted and cursed with the presence of the dead.

Their dwellings, and a health centre set up by Brazil's indigenous agency, Funai, had to be rebuilt elsewhere in the reserve.

The two planes were travelling in opposite directions when they collided over an area of the Amazon forest in the state of Mato Grosso.

The Embraer Legacy 600 private jet, which was travelling to the United States, managed to fly to a nearby airport and land safely. But the Gol Boeing 737-8EH aircraft crashed in the middle of the reserve, killing all 154 people onboard.

The airline and tribe leaders came to an out-of-court agreement which was signed by the Caiapó at a ceremony earlier this month.

The Caiapó chief is Raoni Metuktire, who became famous when he travelled around the world with British rock star Sting in the late-1980s to highlight the destruction of the Amazon rainforest.

He campaigned for the demarcation of indigenous lands, threatened by hydroelectric dams, illegal mining and the expansion of soya plantations.

His foundation will manage the compensation money, under the watch of Funai and Brazil's Attorney General's Office.