In a strong show of Sepa's power, Mr Pan said his administration would halt the approval process for all projects involving the Huaneng, Datang, Huadian and Guodian power groups unless they took immediate action to meet environmental standards.

Four industrial cities - Tangshan in Hebei province , Luliang in Shanxi , Liupanshui in Guizhou , and Laiwu in Shandong - have also been penalised for supporting projects that violated environmental laws and caused serious pollution. The administration will suspend approval for all new projects in the four cities.

Mr Pan said officials at the four power firms and local governments would be held responsible for violations. 'It is the first time since the establishment of the administration that such penalities have been meted out to punish those administrative regions, industries or large enterprises,' he said.

'Approval for all the projects, with the exception of those in the recycling economy, will be suspended until they have rectified projects violating the law.'

It is the third year in a row Sepa has tried to flex its muscle to punish polluters for violating environmental standards. But unlike previous years, Sepa's latest action imposes tougher punishments and involves bigger state firms.

According to Mr Pan, previous efforts to curb pollution won public support but only achieved limited results due to resistance from development-minded local officials and powerful interest groups. 'The newly adopted approval restrictions are meant to tackle the problem,' he said.

Tangshan, which borders Beijing, was singled out by Mr Pan for having built more than 70 steel factories, 80 per cent of them without mandatory environmental assessments. The city's steel output accounts for about 10 per cent of the national total and its mostly small-sized plants have caused appalling air and water pollution.

The 82 projects cover 12 industries and 22 provinces and municipalities, with a chemical and steel project by the Baogang Group in Inner Mongolia , worth 18.72 billion yuan, topping the list.

'Some local authorities and industries have defied the government's macro-regulation policy and pursued their own interests by blindly and illegally developing high-energy-use and high-pollution sectors, such as steel, metallurgy, electricity and chemicals,' Mr Pan said.

But he did not say how the authorities would deal with 29 finished projects that fell short of standards.

Mr Pan also admitted that the mainland failed last year to meet energy consumption and pollution reduction targets put forward by Premier Wen Jiabao .

'Last year saw 161 major pollution incidents, which averaged one every two days,' he said.