The funding would also solve the plight of a further 10 million people who drink unsafe water this year as planned in the latest five-year economic blueprint, Mr Jiao said.

By the end of 2004, the government had made drinking water more accessible for 56 million people and safer for a further 110 million people, according to the report.

The 11th five-year plan from 2006 to 2010 seeks to provide safe drinking water for 100 million of the country's rural population. Zhai Haohui , another vice-minister of the ministry, said last year that more than 360 million rural residents were living without safe drinking water.

Between 2000 and 2005, 22 billion yuan was spent to make water more accessible for villagers in central and western areas.

An earlier report by the official Outlook Weekly said more than 50 per cent of environmentally destructive accidents last year had caused water pollution.

China has only 7 per cent of the world's water reserves, but breakneck economic growth over the past two decades has increased pollution and made clean water supplies even scarcer.

A survey last year found that only 47 per cent of water samples collected from 345 sections of 175 mainstream rivers were drinkable. Another survey also conducted last year showed that half of the 52 lakes across China it examined were heavily polluted.

The situation is further complicated by shrinking water resources. According to a Xinhua report completed last year, 20 natural lakes disappear every year on average and about 1,000 had vanished in the past 50 years.

During a five-yearly national conference for environmental officials in Beijing last week, the State Environmental Protection Administration director, Zhou Shengxian , pledged to make clean drinking water for the people the government's top priority.

The National People's Congress has passed a law barring sewage or chemical waste discharges into agricultural areas amid public fears for food and water safety. It will take effect from November 1.