A district court here turned down Thursday a suit filed by residents who said it was illegal for the Mie Prefectural Government to spend taxpayers' money on repaying construction debts for the controversial Nagara River Dam.

The plaintiffs, led by Masando Narita, a member of the city assembly of Kuwana, argued that the prefecture's decision in 1995 to put up 35.5 billion yen for the dam's construction was illegal.

The prefectural government made the decision on the assumption that water from the dam would be put to industrial use, but Narita said the decision was illegal because there was no demand for the water at local industrial plants.

In dismissing the suit, presiding Judge Keiichi Uchida of the Tsu District Court said the possibility of such demand emerging in the future could not be ruled out.