Jiangxi Province plans to build a 2,800-meter dam to protect Poyang Lake, the country's largest freshwater lake, from the impact of the Three Gorges Dam, the Oriental Morning Post reported yesterday.

The lake has shrunk to 740 million cubic meters - 87 percent smaller than it was in previous years - during the current drought, the worst in 50 years, that has plagued the middle and lower reaches of the Yangtze River for months.

The Three Gorges Dam had a great impact on Poyang Lake because it prevented the Yangtze River water pouring into the lake, Wang Xiaohong, director of the Mountain, River and Lake Development Committee of the province, told the Shanghai newspaper.

Water levels had been above 19.5 meters but dropped to only 16 meters after the main part of the dam was completed in 2006, the report said.

The Poyang dam plan was approved by the State Council, the country's Cabinet, in December 2009, but work has yet to begin as experts feared the dam might worsen the situation of the lake, the report added.

On May 18, the Cabinet issued a guideline promising continued efforts to protect the environment, prevent geological disasters and minimize the Three Gorges Dam's impact on the middle and lower reaches of the Yangtze.

The Three Gorges Dam has also impacted on the ecology of the Yangtze because it stops nutrients - an important food source to many creatures - reaching the lower reaches, Li Jianhua, a professor of the College of Environment Science and Engineering of the Tongji University, told the newspaper.

Experts said geological disasters occurred in Zigui County in central China's Hubei Province after the dam began storing water, although no evidence showed any direct links, the report said.

About 1.35 million people have been relocated to make way for the world's largest hydroelectric dam since the project started in 1993. Shanghai accepted more than 7,000 people, now living in Fengxian District and the Pudong New Area.

But many people, mostly farmers and fishermen whose families lived along the Yangtze River for generations, didn't settle and moved back to their native land.

They formed new communities in the Three Gorges area, causing damage to the ecosystem, said Lu Yaoru, an expert with the Chinese Academy of Engineering.

The smooth resettlement of relocated people and their well-being are key factors to determine whether the project is successful, said officials.

The Three Gorges Project had a budget?of US$22.5 billion.