using bulldozers to clear "pathways'' for an environmental impact study because of fears that caves under the hill have been damaged.

Following a site visit to Ship's Hill at Castle Harbour -- a wooded hill believed to be riddled with caves and the intended site of a 36-condominium complex -- Mr. Smith said he had instructed developers Bermuda Properties Ltd.

not to use bulldozers and heavy equipment for site clearing.

"I am concerned that the weight of these machines may already have done some damage to caves underlying the site,'' he said.

He added he was anxious no further damage be done before the site is examined by experts.

BPL obtained a license from the Planning Department to clear "pathways'' of minimal practical width not exceeding ten feet to carry out an environmental impact and cave study.

But environmentalists claim BPL has used the licence to clear access roads with bulldozers, and damaging caves and endemic plant species in the process.

Mr. Smith yesterday moved to clarify the situation by pointing out that no permit has been issued to BPL to develop or build on the site. He said only a licence to clear the land for an environmental impact study had been granted.

He added that the work permitted by the licence had been completed and that the study of the environment would be made public.

"Once Bermuda Properties Ltd. has completed this environmental study, they will have to apply in the normal way to the Development Applications Board for permission to develop the site, and then again for permission to build,'' Mr.

Smith said. "This procedure does allow for public comment in the normal way.'' Planning permission in principle was granted by former Environment Minister Mr. Gerald Simons in July but he laid down a number of conditions including carrying out an environmental impact and cave study before the Development Applications Board gave the green light for development of the site.

The caves underneath Ship's Hill are of particular interest to environmentalists and cavers who claim Church and Hilltop Caves are some of the largest and most historic caves on the Island.

Church Cave is home to an endemic shrimp found only in one other cave in Bermuda.

Amateur caver and vice-president of the Bermuda Cave Diving Association Mr.

Andrew Mello said the area was one of the highest concentrations of caves in Bermuda.

"It is a very delicate ecosystem,'' he said. "They will have to blast because the rock is so hard and it could do irreparable damage to the caves.

It could have detrimental implications for the underlying cave and endemic species.''