As I dived in, I took the village youths' advice – closing my mouth and keeping my eyes firmly shut. When I surfaced, about 30 yards from where I had hit the chocolate-coloured ferment, my stomach and arms felt as though I had body-surfed down the escalator at London's King's Cross station.

That was my first experience of the 800-mile-long Narmada river that flows through three Indian states – Madhya Pradesh, Maharashtra and the often drought-afflicted Gujarat, before flowing into the Indian Ocean.

The purpose of my visit to Gujarat had been to research the plight of 40,000 indigenous people who found themselves imprisoned in the Shoolpaneshwar wildlife sanctuary, which was designed for animals rather than people. They are victims of an environmental campaign, conducted by groups such as the World Wildlife Fund and its sister organisation, The World Conservation Union, to stop the damming of the Narmada river.

More than 3,000 dams of varying sizes, which would control the Narmada and its 41 tributaries, were proposed by Nehru's government in the 1940s. Thirty of these are large projects, including the Sardar Sarovar Project (SSP). But the SSP quickly became the focus of opposition from international and Indian environmental campaigners, who believed it represented all that is bad about mega-projects in the developing world.

The sanctuary was created as a sop to those who opposed the mega-project and its supposed environmental destruction. Its creation has robbed thousands of tribal people of their basic rights. The collection of firewood (essential for fuel) was outlawed, as was repairing roads and bridges, as was installing badly needed electricity. They were all seen as development, and were forbidden under India's draconian wildlife protection laws.

In researching the sanctuary I made contact with both local people opposed to it and those who wanted the Narmada dam to be finished after decades of delays. It is often only locals opposed to mega-projects – given access to the media and an international platform by western non-governmental organisations (NGOs) – whose voices are heard. This frequently distorts the picture – it was refreshing to find groups and local people who saw the benefits of the dam.

Now has come news of yet another delay in the building of the dams that have been planned since 1946. In an interstate dispute, the Congress-led Maharashtra government are halting the installation of gates for the dam and restricting work to a height of 138 metres. That height is key; it allows water to flow down channels and canals to the areas affected by drought. India's supreme court has to be consulted for every successive five-metre increase in the height of the dam. The losers in what has become a bitter local and international political struggle are the poor living alongside the river. They have become little more than a stage army, marched out and back by those who do not want the project completed.

The Indian government has a poor track record in resettling those affected by the construction of dams. This brought local opposition from tribes expected to move as the Narmada valley flooded. Urban-based Indian intellectuals such as Vandana Shiva opposed the dam, fearing its impact on traditional rural life. Novelist Arundhati Roy has suggested that the effect on those being moved was akin to the Holocaust, and that suggesting that this project could benefit millions was "fascist maths". Salman Rushdie has also joined the anti-campaign.

Western environmental NGOs, such as the Environmental Defence Fund (EDF) and the International River Network (IRN), joined the anti-dam crusade. The EDF argued that important biodiversity would be lost if the Narmada valley was flooded. For the US-based NGO, the IRN, "a river is a thing of grace and beauty, a mystery and a metaphor". This romantic nonsense has helped slow down a project that could help alleviate millions from poverty.

This opposition became an effective barrier to the dam. The campaign led by the Narmada Bachao Andolan (Struggle to Save the Narmada River), funded by the EDF, has held up the project's completion. NBA supporters have physically attacked local people who accepted compensation for moving.

To an outsider, the dam's benefits to local people seemed obvious. It will provide drinking water for an area with a population of 18 million – and for a prospective population that has been projected to reach over 40 million by 2021. The dam has a power generation capacity of 1,450 megawatts. It will provide irrigation facilities to an area the size of the south-east of England. The project aims to make the area "drought-proof": and 75% of Gujarat and 100% of Rajhastan are prone to droughts.

As the illuminating new book Energise!, by James Woudhuysen and James Kaplinsky, points out, dams are what we make of them. Loss of wildlife, the generation of greenhouse gases and even resettlement are a small price to pay compared with the benefits of a dam – if they are well planned and run.

If opponents of the dam had fought for proper resettlement and rehabilitation packages, instead of an unrealistic programme of outright opposition, including the creation of a white elephant of a wildlife sanctuary, then local people would be seeing the benefits of the dam and not contemplating an uncertain future.