The operator of China's Three Gorges Dam has defended the controversial project, saying it has a "sacred mission" to control flooding, generate clean energy and ensure water supply.

Just one month ago, the government said the world's largest hydroelectric dam had caused a host of ills that must be "urgently" addressed -- a rare admission of problems in the project it has long praised as a world wonder.

"Managing and operating well the Three Gorges Dam is the sacred mission entrusted to the Three Gorges Corporation by the country," the company said in a social responsibility report published at the weekend.

"All along we have prioritised social benefits" and "given full play to the benefits of flood control, electricity generation, navigation, downstream water supply and ecology," it said.

But critics of the $22.5 billion dam on the Yangtze River have long warned of its environmental, social and other costs.

Despite these concerns, the operator said it planned to build four "giant hydroelectric stations" on the upper reaches of the Yangtze that will generate nearly 43 gigawatts of power -- equivalent to two Three Gorges Dams.

The social responsibility report said the dam had generated 368.4 billion kilowatt hours of electricity by the end of 2009 and last year, during the worst flooding in years, held back 7.6 billion cubic metres of water.

The operators also provided nearly $250 million for poverty alleviation and disaster relief, the report said.

Construction of the Three Gorges Dam began in 1993 and the project in central China began generating power in 2008.

Authorities have hailed it as a major new clean energy source and a way to tame the notoriously flood-prone Yangtze, China's longest river.

But the State Council, or cabinet, acknowledged the environmental, social and geological concerns after a meeting last month and said "there are problems that must be urgently resolved".

About 1.4 million people were displaced to make way for the dam and its huge reservoir, which has put several cultural heritage sites deep under water.

Chinese experts and officials have warned of the potential for seismic disturbances -- including landslides and mudflows -- caused by the massive weight of the reservoir's water on the region's geology.

Environmentalists have cautioned the reservoir would serve as a giant catchment for China's notorious pollution, ruining water quality.

The government said last August that billions of dollars would be needed to address environmental damage along the river, including sewage treatment.

China is relying on hydroelectric power as a major component in its energy mix as it seeks to meet soaring power needs. It has dozens of dams either under construction or on the drawing board, according to state media reports.

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