(Recasts with bishop taken to hospital)

BRASILIA, Dec 19 (Reuters) - A Brazilian bishop who is on a three-week hunger strike to protest against a government irrigation project was taken to hospital on Wednesday as the Supreme Court ruled the project's construction could restart.

The irrigation project aims to pump water from the Sao Francisco River through 435 miles (700 km) of canals to people and farms in the arid and poor northeast, where President Luiz Inacio Lula da Silva was born.

Bishop Luiz Cappio, who was taken to hospital after he lost consciousness on Wednesday afternoon, began the hunger strike on Nov. 27 to protest against the project, which he and other critics say is too expensive and would benefit wealthy landowners more than poor peasants.

Environmentalists fear reducing the river's level could affect navigability, fish migration and biodiversity.

The bishop has not suspended his hunger strike, said a spokesperson at Bahia state's Pastoral Land Commission, which belongs to the Brazilian Catholic Church.

The opposition to Brazil's largest public works venture was a setback for Lula, the main defender of the venture, and could renew investors' concern about regulatory uncertainty surrounding infrastructure projects.

The Supreme Court overruled a federal judge who last week questioned the government's authority for land and water use and ordered construction to halt. The court also rejected challenges to the project's environmental permit.

The government has been trying to negotiate an end to Cappio's hunger strike by offering time for more public debate on the project. Lula also asked the Vatican to mediate. (Reporting by Raymond Colitt and Sergio Spagnuolo; Writing by Inae Riveras, Editing by Sandra Maler)

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