A European press agency released a photograph last week showing labourers working on a structure comprising iron bars that looked like scaffolding. It is reportedly preparatory work for the dam project.

Mr Wang said the original plan to build 13 hydroelectric dams on the last undammed river in China was initiated by electricity authorities, and had not been approved by the central government.

But he also added that there were no plans to scrap the project, as has been widely speculated by environmental activists, despite strong pressure from UN heritage body Unesco, which has threatened to remove the Three Parallel Rivers Protected Areas in the province from the World Heritage List.

'My personal view is that the construction of a couple of uncontroversial dams can start first. Then, [the government] can make a more comprehensive plan about the development of the Nu River in the meantime,' he said.

On approving the less controversial dams, Mr Wang said: 'I think this government won't be able to do it, they will have to wait until the next government [after the reshuffles of leaders is completed in March next year].

'We have to make use of the time to do some preliminary planning now.'

Mr Wang's remark shows that the central government is still not willing to give up the project entirely to retain the World Heritage site in the area.

Mr Wang said the central government was now considering a plan on the comprehensive development of the Nu River that would include power generation, environmental protection, water flow and navigation.

Zuo Xiaoping, director of world heritage and historic interest areas at the Ministry of Construction, has also dismissed reports that construction had started.

Mr Wang said yesterday a project under which water would be transferred from the Yangtze River to Beijing would not be completed next year, although part of the project to transfer water from reservoirs in neighbouring Hebei province to Beijing would be operational next year.