By Daniel Flynn

LOMPOUL, Senegal, May 31 (Reuters) - The wind-swept beach at the village of Lompoul stretches as far as the eye can see, washed by Atlantic breakers and dotted with brightly painted African fishing boats.

It is on this remote and beautiful stretch of coast, near to his birthplace, that Senegalese President Abdoulaye Wade sees a glittering new capital rising from the sands -- a $30 billion "Dubai on the Atlantic".

Dakar, the fast-growing coastal capital of the former French colony, is being strangled by lack of space. It lies on a peninsula at Africa's most westerly point, linked to the continent by a 20-km (13 mile) wide isthmus choked by traffic.

At Lompoul, some 150 km north, the rolling dunes stretch far inland. Octogenarian Wade has reserved 25,000 hectares here for his new capital, dubbed "W D.C." by planners.

"In three years, the central government will no longer be in Dakar, but in the new capital," said Ahmed Khalifa Niasse, the minister leading the project. "In the first two years, we expect 200,000 people to come, and three years later, 2 million."

Senegal has signed a memorandum of understanding with Dubai World, the state holding behind the Gulf city's real estate boom, and construction is due to start next year.

"We think this new Dubai can be more attractive than the Dubai in the Gulf," said Niasse, who hopes a planned tax-free port could become the largest assembly-point for Asian goods going to the West. "We are mid-route for the whole world."

The relocation has precedents in West Africa. The "Big Man" of Ivory Coast, ex-president Felix Houphouet-Boigny, moved the capital to his hometown Yamoussoukro, deep in the bush, where he built a life-size replica of St. Peter's Basilica.

Nigeria also shifted its government to the new city of Abuja in 1991, partly to escape overcrowded Lagos. But these lifeless capitals remain overshadowed by their bustling predecessors.

"It is not easy to move a capital. There are universities, schools and businesses in Dakar, and one of West Africa's biggest ports. Are they simply going to move to an isolated area?" said Mactar Diouf, economics professor at Dakar University. "I doubt this is ever going to happen."

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Once feted as "little Paris" for its elegant colonial architecture, Dakar is beset by a lack of drinking water, overcrowded roads, power cuts and poor sanitary conditions. Its teeming suburbs house a fifth of Senegal's 12 million people.

Six years after taking office, Wade unveiled a raft of infrastructure projects last year, including an overhaul of Dakar's main thoroughfares and a new international airport at Diass, to be built by the Saudi Bin Laden Construction Group.

But with unemployment running over 40 percent and many young Senegalese risking their lives on the perilous boat-trip to Europe, critics have questioned whether the impoverished country has no better way of spending its money.

"We won't indebt ourselves for this project. It's the investors who take all the risk," counters Niasse. Dubai World and its partners will fund the construction and will then lease buildings for up to 50 years to the state and businesses.

"This is pure economic liberalism. We have found a way to free ourselves from the Bretton Woods system," said Niasse, blaming the World Bank and the International Monetary Fund for 50 years of underdevelopment by entangling Senegal in debt.

A blueprint for the city has been drafted by Parisian architect Olivier-Clement Cacoub, incorporating traditional Maghreb styles. Cacoub once designed a jungle palace for Congo's ex-dictator Mobutu Sese Seko known as the "African Versaille". The plans for Lompoul are ambitious: Africa's first high-speed train linking the capital with Dakar, plus an eight-lane toll-road. Niasse also wants to build Africa's first Formula 1 circuit in the arid Sahelian bush.

Sat on a woven mat under a white-flowered neem tree, Sira Sow, village chief of Lompoul like his father and grandfather before him, said he was impatient for the project to begin.

"This is a beautiful place now, with air and space. We know that is going to change, but that is fine as long as it brings jobs," said Sow, adding that most people favour the project.

Fisherman on the nearby beach, where women carry the day's catch in plastic buckets on their heads, hope the new city will mean schools and hospitals. At present, they complain most them cannot read or write and they must travel far for healthcare.

"Some people are afraid they will lose their land," said Sow. "The president has a duty to come here and hear our concerns before he does anything."

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