WASHINGTON — The House on Wednesday overwhelmingly defeated a proposed settlement to a longtime land claim dispute in the Upper Peninsula that would pave the way for two Michigan Indian tribes to build casinos in southeastern Michigan.

Supporters of the land swap deal lost, 121-298.

Under the proposal, the tribes — the Sault Ste. Marie tribe of Chippewa Indians and the Bay Mills Indian Community — would swap their claim to land in the Charlotte Beach area for parcels in Port Huron and Romulus, where they could build casinos.

“We’re not happy with the outcome,” said Cory Wilson, spokesman for the Sault Ste. Marie tribe.

“We are going to find out what options we have. We do not want to say this thing is dead. We just don’t know. We will get our experts in the room and find out what our options are,” he added.

In a heated debate on the House floor, supporters — including Reps. John Dingell, D-Dearborn, and Candice Miller, R-Harrison Township — argued that the deal would lead to much-needed jobs in their districts.

“Let us give justice to the Indians,” said Dingell, adding the two new casinos could provide up to 4,000 “desperately needed jobs” in Romulus in his district and another 4,000 jobs in Port Huron, in Miller’s district.

The possibility of the new casinos in southeastern Michigan drew equally passionate opponents.

Detroit’s lawmakers — John Conyers and Carolyn Kilpatrick — argue the casinos could threaten jobs at the city’s three gaming houses.

Meanwhile, critics from other states warned that allowing Indians to open casinos 350 miles from their original land could open the floodgates for tribes elsewhere to create land disputes so they could open casinos far away from their reservations.

Even had it passed the House, the proposed deal faced little chance in the Senate, where it is opposed by Senate Majority Leader Harry Reid.

“Sen. Reid has consistently opposed these bills for many years and will continue to do so,” said Reid spokesman Jim Manley.

Rep. Bart Stupak, D-Menominee, said non-Indian homeowners at Charlotte Beach have seen their property values assessed at 90 percent below value because of the legal cloud over the land.

The problem arose after speculators in the mid-1800s sold tribal lands without consent.

In 2002, then-Gov. John Engler reached a deal with the parties — later supported by Gov. Jennifer Granholm — to settle the dispute with the land swap.

The deal, however, requires ratification by the Congress.