Backed by provincial and local governments as a poverty-reduction project, the scheme originally called for the construction of 13 dams on the Nujiang, one of the mainland's last free-flowing rivers, to produce more than 103 billion KW of electricity a year.

However, the commission will authorise a slimmed-down version of the project with four dams being built. The four include projects at Liuku and Songta, but it is not known which of the other proposed dams will go ahead.

Premier Wen Jiabao has reportedly approved the commission's decision. In February, Mr Wen ordered the hydroelectric project to be suspended while a thorough environmental impact assessment was carried out.

The approval marks a bitter defeat for mainland environmentalists who launched a massive public campaign against the project.

Opponents argued the dams would destroy thousands of rare and endangered plants and animals, and force the relocation of thousands of people, most of them from western Yunnan's 22 ethnic minorities. The headwaters of the Nujiang have been declared a Unesco World Heritage site.

They criticised the scheme as a money-grabbing exercise by the power industry and local officials. Downstream nations such as Myanmar and Thailand have also voiced concerns about the impact of the project.

Nujiang county officials said they were unaware of any impending decision by the central government on the dam project. 'From our understanding, the central government is continuing its scientific analysis,' said one official.

However, environmentalists expressed disappointment.

'We are saddened about the decision. However, I believe our efforts have not been in vain because we educated the public about the dangers of dams and kept the local governments accountable to the law,' said Wang Yongchen , of the Green Earth Volunteers environmental group.

Ms Wang said they planned to attend the public hearing where the approval of the project was expected to be announced.

Commission officials recently issued a series of statements urging the nation to develop its hydropower resources in the face of worsening energy shortages.

Last week, vice-chairman Zhang Guobao was quoted as saying the authorities would invest 1 trillion yuan in hydroelectric projects over the next 15 years, identifying Yunnan as a key development area.

In an apparent attempt to allay environmental concerns, the Yunnan government announced yesterday that it accepted a proposal calling for increased environmental-protection efforts in world heritage watershed areas and a crackdown on illegal development.