The water supply to as many as 300 million people fails the Government's health standard, a report said yesterday. A Ministry of Water Resources survey of more than 700 rivers also found 46 per cent were polluted, meaning they fell within grade four and five of the Government's five-grade water quality rating system, the China Economic Times said. Under the system, grade one water is clean and suitable for consumption but grade five is considered undrinkable. According to the survey, 10 per cent of the rivers were rated grade five. More than 90 per cent of cities faced serious water pollution problems. Ministry experts said industrial pollution was the main source of contamination. They estimated factories produced about 60 billion tonnes of waste and sewage each year and 80 per cent of that was discharged into rivers without treatment. Although drinking water classified as grade four may not lead to immediate health problems, there have been many reports of residents who live near these rivers suffering long-term illness. The central Government has repeatedly vowed to close factories and build water treatment facilities, but local government officials complain that lost production would destabilise the economy and they have demanded subsidies to clean up the environment. For example, Guangdong has long said it would improve water treatment along the Dongjiang where it draws water to supply Hong Kong. But local officials are reluctant to act, claiming they do not benefit from the water sales and cannot finance the treatment plants on their own. It has been reported that about 400 of the mainland's 668 cities are short of water and 100 face serious problems.