Panamanians have overwhelmingly backed a plan to give their famous 92-year-old canal its biggest-ever overhaul.
With two-thirds of referendum results in, Panamanians voted four-to-one to support a $5.25 billion facelift allowing the inter-oceanic canal to handle mammoth modern cargo ships, the Central American nation's Electoral Tribunal reported.
The capacity of the canal, which was US territory until it was returned to Panama in 1999, will double under the plan, allowing it to transport twice as many ships between the Atlantic and Pacific oceans, boosting government revenue.
Expansion of the canal, first opened in 1914, will create a jobs boost for Panama's three million people and spark economic growth, supporters say. But critics warn the plan could bankrupt the small nation, which is already burdened with huge debts and where most people live in poverty, if costs spiral.
Opened in 1914 at a cost of $375 million and 25,000 lives, the canal saves ships a long haul around South America's treacherous Cape Horn and carries around 4 per cent of world maritime trade.
But its lock system is too small for many modern tankers, and ships making the passage - mainly from the United States, Japan, China and Chile - also face longer waits to make the 80 kilometre inter-oceanic trip as global shipping grows.
The expansion plan will build wider locks and deeper and bigger access channels, and allow ships with 12,000 containers pass through, up from around 4,000 containers at present.
The Panama Canal Authority, which runs the waterway, warns the route will become log-jammed in seven years if nothing is done.
The project, due to start in 2008 and finish in 2014, needs $2.3 billion in loans or bonds to be paid back with revenues from higher tolls from ships using the canal, whose upgrade will not interrupt traffic.