Five weeks before the start of the United Nations Summit on Sustainable Development, the government said Rio's hotels would cut prices during the event by at least 25 percent.

The summit, known as Rio + 20 because of the two-decade anniversary of the landmark Earth Summit in the city, is expected to lure 50,000 visitors and more than 100 government leaders from around the world.

High demand for scarce vacancies, in part because of block reservations made by Brazil's government to guarantee rooms for visiting delegations, prompted hotels in recent weeks to begin charging exorbitant rates for the event, which kicks off June 20.

Online research by Reuters early this month found hotels were charging at least five times as much for rooms during the summit as they were just days afterward.

The high prices rattled many non-governmental groups and other would-be visitors, some of whom cancelled plans to attend. Even some government groups, including the European Parliament, decided to slash the size of their delegations.

The prices also prompted concern within the government, and outcries from critics, many of whom fear similar problems could occur when Brazil hosts the World Cup of soccer in 2014 and the Olympics two years later.

The concerns led to hearings last week in Brazil's senate, public fretting by the country's foreign minister, and meetings between Rio's mayor and local hoteliers. Those meetings were followed this week by the negotiations with Brazil's federal government.

Wednesday's agreement, the government said, resolves the issue by reducing the commission paid to an agency that had won a concession to manage reservations during the event. Hotels also agreed to break up mandatory multi-day packages that had been set up for visitors during the dates of the summit, even for those not staying the entire event.

(Reporting By Eduardo Simoes and Ana Flor; Writing by Paulo Prada; Editing by Philip Barbara)

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