The biggest statue in the world will soon begin to climb above the horizon of India's poorest state, Bihar. The vast Buddha image, which will stand nearly twice as high as the Statue of Liberty, is at an advanced stage of planning, and construction is due to begin in September for completion in 2005.

The Buddha Maitreya, the "Buddha of the Future", will be 500ft (150m) high and the eye-boggling centrepiece of a 35-acre garden, close to the pilgrimage centre of Bodhgaya.

It was under a peepul tree in Bodhgaya 2,500 years ago that the historical Buddha, Shakyamuni, attained enlightenment, and began preaching the dharma (Buddhist law) that established one of the great religions.

The vast Buddha will sit on a throne, which is itself a 17-storey building. Within the structure, additional Buddhas will be on display ­ a 40ft statue of Maitreya in the atrium, and 100,000 small Maitreyas, called tsa-tsas, covering one wall.

"From the main atrium, elevators will convey visitors up to a large Shakyamuni Buddha prayer hall, shrine rooms and rooftop terraced gardens," purrs the press pack. "From there, visitors can travel upwards into the body of the statue, where there will be more shrine rooms in various levels."

Commercial logic would suggest an observation platform in the Buddha's scalp, but perhaps the sponsors are keeping that one up their sleeve.

The project, Maitreya Project International, is budgeted at $150m (£111m), raised from the donations of the faithful. The Croydon-based engineering firm that has been given the task, Mott MacDonald, has been told to come up with a structure that will "operate for 1,000 years without major renewal works, while enhancing the lives of those using the Project and the lives of those living in the region". Allan Ockenden, its project director, told the Independent on Sunday, "The two primary spaces inside will accommodate 6,000 people at one time. We estimate there will be two million visits per year."

But among the impoverished peasants in the vicinity, the project has aroused deep misgivings. The Gram Granrajya Manch, or Forum of Village Republics, has written to the project's directors saying: "Bodhgaya is being developed not so much as a centre of spirituality but as a focal point of the tourism industry."

The letter goes on: "In the name of the Buddha and the development of Bodhgaya, the villages are being affected adversely. Self-sufficient, agro-based communities are deteriorating rapidly... The negative effects of the tourist industry and market forces are daily staring us in the face. A few local people have overnight become millionaires ­ but a great many are reduced to poverty."

So, what is the statue for? In his response to the villagers' concerns, Peter Kedge, the project director, explained: "The great quality of holy objects is that, irrespective of motivation, circumambulating, making offerings, making prayers and otherwise venerating them creates positive karma in proportion to the size of the holy object. Building holy objects is, therefore, the easiest way to offer benefit to living beings."

The impulse for the project came from a Tibetan Buddhist monk, Lama Thubten Yeshe, who conveyed his desire to a disciple, Lama Zopa Rinpoche, the project's spiritual adviser. "Lama Yeshe advised me before he passed away to build a very large statue of Maitreya Buddha at Bodhgaya," says Lama Zopa. "Our main goal is not the statue itself; it is the peace and happiness of all beings..."

Huge images have been a feature of Buddhism for at least 1,700 years. The two giant Buddhas in Afghanistan destroyed by the Taliban this year may be no more than a memory now, but huge Buddhas, modern as well as ancient, are to be found in Thailand, Sri Lanka, Japan and other Buddhist countries.

India, however, is no longer a Buddhist country. Today, the main Buddhist pilgrimage sites in Bihar, including Bodhgaya, are supervised jointly by Hindu and Buddhist priests ­ the Buddha having been adopted by Hinduism as an avatar of the god Vishnu ­ and squabbling is endemic. But the objections of the villages are more fundamental. "The unrest and suffering in the world today is a product of the consumer/materialist culture. Can peace be attained through devotion to a statue? What will our villages have to gain?" says the villagers' letter.