The Supreme Court yesterday ordered the United States to pay the Sioux nation more than $105 million for the government's illegal seizure of Indian lands in South Dakota's Black Hills a century ago.

The court voted, 8 to 1, in upholding the largest Indian land compensation award in U.S. history and setting a standard for future claims that could greatly assist other tribes trying to recover from broken treaties.

The court ruled that the "nations" given the Sioux in the 1870s when the government took the land were not "just compensation" for the 7.3 million gold-laden acres, sacred to the Sioux.

Though the award was the largest, it does not approach the 1980 equivalent of the $70 million the Indians sought last century or the billions of dollars worth of gold extracted by whites from the Home Stake Mine on the territory.

The case was resolved yesterday, but not the controversy. Many Indian leaders are demanding return of the land, rather than money for it.

The Black Hills, encompassing 6,000 square miles in western South Dakota and northeastern Wyoming, draw their name from the dark pines covering the peaks. The area is now primarily a tourist attraction, much of it national park and national forest, with the most famous feature being the Mount Rushmore busts of four presidents.

The court case, which is about 60 years old, is one of the longest of any in U.S. history. The land legally belonged to the Sioux under the 1851 Fort Laramie Treaty, which was approved by Congress before discovery of gold in the area in the 1870s.

Following that discovery, miners descended on the territory, sparking armed conflict with the Indians and ultimately the "last stand" of Gen. George Armstrong Custer, who died while fighting Sioux chief Sitting Bull at the Little Bighorn River in 1876.

Unable to control the miners or the Indians, the government tried to acquire the land by trading it for "subsistence provisions" worth about $6 million at the time.

When the Sioux proved uninterested in the deal, Congress, enraged by Custer's death, seized the land unilaterally, claiming the Indians agreed to it.

In 1922, the Sioux began a legal fight and lobbying effort to recover the land.

After Congress acted several times to help the Indians, the U.S. Court of Claims ruled in 1979 that the Sioux deserved $17 million for the land and 5 percent annual interest on that amount, for a total of at least $105 million.

There was no "good-faith" effort by the government to award the Indians just compensation, the Court of Claims ruled. Under Indian claims law, the $17 million can be awarded merely for a "dishonorable dealing" by the government. Everyone -- including the Justice Department -- agreed that the Sioux were "dishonorably treated," and the government did not contest the $17 million award.

The 5 percent interest can be awarded only if the government violated the Fifth Amendment's ban on taking land without just compensation. In its arguments before the Supreme Court, the Justice Department denied that such a constitutional violation had occurred.

With Justice Harry A. Blackmun writing for the majority, the court yesterday rejected the government's argument. The lower court was correct in holding that the "subsistence rations" given the Sioux were only payment for "depriving them of their chosen way of life and . . . not intended to compensate them for the taking of the Black Hills," Blackmun wrote.

The dissenter in the opinion was Justice William H. Rehnquist.

The details of disbursing the money from the U.S. Treasury are to be worked out between the government and Sioux lawyers. But the Sioux have been debating for years whether to accept the money or seek return of the land instead.

In a referendum last year, the Standing Rock Sioux voted to accept the money. Other scheduled votes are likely to go the other way.

Lawyers were divided yesterday on the question of both accepting the money and seeking return of the land. The latter would require at least an act of Congress, which is thought highly unlikely.

The Treasury Department will place the funds in interest-bearing accounts until Indian leaders and government officials sort out who is entitled to share in the award.

The legal fees from such an award are themselves potentially massive. Several lawyers representing various Sioux reservations could divide as much as $10 million. For some of these attorneys, however, it will be the first fees they have seen from a case they have been involved in for 12 to 20 years.

The tribes and Bureau of Indian Affairs officials must decide what to do with the rest, and submit their plan to Congress.