By Stuart Grudgings

BRASILIA (Reuters) - Hailed as Brazil's first "green president" when he took office, Luiz Inacio Lula da Silva's environmental credentials appear thinner than ever after the resignation of Amazon defender Marina Silva.

The former rubber tapper and union activist was one of the fresh faces who marked a break from Brazil's conservative past when she was appointed environment minister in Lula's first cabinet.

Her departure on Tuesday underlines Lula's long journey from firebrand union leader to business-friendly president more than five years after he became Brazil's first working-class leader.

"He is increasingly conservative," said Christopher Garman, head of the Latin America practice at Eurasia Group. "He has caved in to the view that the Amazon has to be developed in some form or fashion."

Silva's resignation comes at a critical moment for the world's largest rain forest as pressure on its resources from high world food prices and growing energy demands push it closer to what environmentalists warn is a "tipping point" of destruction.

Silva had become increasingly isolated inside Lula's team, analysts say, over issues ranging from the government's support for biofuels, to genetically modified crops and nuclear power.

A major clash with business interests and other ministries came with her opposition to the expansion of hydroelectric power from dams in the Amazon region at a time when fast-growing Brazil is hungry for energy.

She unsuccessfully opposed several infrastructure projects in the rain forest, including two hydroelectric dams and a road that will link the western grain belt with the Amazon River.

The last straw for Silva appeared to come last week when Lula publicly rebuffed her and named Roberto Mangabeira Unger, minister for strategic issues, to oversee the implementation of a government development plan for the Amazon.

Silva said in her resignation letter that she stepped down because of the "difficulty she had been having for some time in carrying out the national environment agenda."

"She probably should have left the government one or two years ago when she was in better shape ... but she's considered a national icon," said David Fleischer, a political scientist

at the University of Brasilia.

STRONG LEGACY

Lula said on Wednesday there was no change in his government's environment policy.

But analysts say it could now be easier to push forward with hydro-electric and other infrastructure projects in the Amazon that have been stalled over environmental concerns, such as the huge Belo Monte Dam in Para state.

"The Amazon will increasingly be a politicized region for the government because it is the most important source of energy," said Garman, noting there were heavy investment plans for mining as well as hydro-electric power.

Lula is presiding over an unprecedented period of economic growth and stability in Brazil, with new power and infrastructure projects seen as crucial to maintain growth at more than 5 percent a year. He has abandoned much of the left-wing agenda of his early political life.

Tom Lovejoy, president of The Heinz Center in Washington, said Brazil needs a strong protector of the Amazon more than ever because the forest is near a point where its rain-making capacity could start to fail and affect the regional climate.

"I think the ultimate judgment here will be about her successor," he said. "It's really important to have a strong person because in my view the Amazon is coming very close to a tipping point".

Steve Schwartzmann of the Environmental Defense Fund in Washington said there had been strong resistance to Silva's efforts to restrict agriculture credit for ranchers and soy planters who were not in compliance with the law.

But Silva would have a lasting legacy, environmentalists said, including having presided over a 20 million hectare (77,200 square mile) expansion of protected area in the Amazon between 2003-2007, almost the size of Britain.

Deforestation in the Amazon fell for three straight years after 2003, but last year saw a sharp increase, coinciding with a rise in global food prices.

(Editing by Kieran Murray)