The minority party said the worsening deforestation was the final straw after what it called a string of disastrous environmental policies by the administration of President Luiz Inacio Lula da Silva.
While numbering only a tiny fraction of the ruling coalition, the departure of the Green Party marks a fresh political setback for the leader following a number of defeats.
Land clearing in the world’s biggest tropical rainforest, the Brazilian Amazon, has risen sharply in the latest figures released by Brazil’s environment ministry.
In the 12 months to August 2004, a near record area of 26,130 square kilometres was either cut down or burned, primarily to make way for cattle ranchers and crop growers.
The level of destruction is almost six percent greater than the same period the year before.
It equates to an area of land roughly the size of Belgium and has been disappearing at a rate of about six football fields every minute.
Environment Minister Marina Silva said the figure was “very high, but we will work to fight this in a structured way, with lasting and effective action, involving all sectors.”
Environmentalists have been outraged by the loss.
Paulo Adario, coordinator of Greenpeace’s Amazon Campaign, told the Associated Press that 70 percent of the rainforest destruction occurred between May and July 2004.
This followed the Brazilian government’s introduction of a A$184.16 million plan to curtail logging and burn-offs.
“Clearly the Amazon is not one of the government’s priorities right now,” Mr Adario said.
Nearly half of the recorded destruction took place in the north-west state of Mato Grosso, where Governor Blairo Maggi runs one of the world’s largest soy bean farms.
Brazil’s booming agricultural sector has reaped significant economic benefits for the country.
Last year, exports of soya, mostly to Europe and China, propelled Brazil to a record trade surplus.
Brazil already has the world’s largest beef industry and is now poised to overtake the US as the world’s major soy bean producer.
But green groups say the cost in terms of habitat loss is a national shame.
The Amazon sprawls over more than half of Brazil, 4.1 million square kilometres, and is home to an estimated 30 percent of the world’s animal and plant species.
Its trees are considered vital to global oxygen production, a process that is being radically reversed by forest fires releasing around 370 million tonnes of greenhouse gases into the atmosphere yearly.
Deforestation could also be threatening the livelihood of a remote indigenous group after a supreme court ruling allowed the resumption of logging in Mato Grosso.
The Isolated Indian unit of Brazil’s Federal Indian Bureau has been fighting since 2001 to protect the hunter-gather group, known as the ‘little people’.
First sighted in the 1980s, no further direct contact has been made with the forest-dwellers since.