World's third largest river starts to rise by 400ft to create the Great Wall of Water

Today heralds the climax of a massive engineering feat to dam the world's third longest river. But while China's leaders celebrate, many of the 700,000 people displaced by the work are bitter. And fears remain that the scheme could spell disaster for the environment

Today one of the most ambitious civil engineering projects in history will begin to transform the world's third largest river. Twenty-two sluice gates will be closed, blocking the flow of the Yangtze. Swollen by summer storms, the waters will swiftly mount the towering sides of the Three Gorges, celebrated by generations of Chinese poets.

Over the next fortnight the Yangtze will rise 400ft, drowning forever the ancient fortresses, temples and tombs celebrated in China's epic The Romance of the Three Kingdoms under a 365-mile-long reservoir. For some, like China's former premier Li Peng, it will be a moment of triumph and vindication. The Three Gorges dam, a massive engineering feat which many said never could - and never should - be attempted, was pushed ahead by the Soviet-trained hydro-engineer in the face of world condemnation after the Tiananmen Square massacre in 1989, for which he took responsibility.

Some sources claim Chinese and foreign teams of experts struggled to complete the final inspection of the great wall of concrete, stretching one and half miles, forcing China to postpone the flooding by several months. On Friday officials denied that alarming cracks in the concrete had been discovered and that Sars fears had prevented Canadian, Swedish and Swiss inspectors from reaching the area. "There have been no delays," insisted a spokesman at Three Gorges Construction Committee.

All shipping on the Yangtze has been suspended. It will resume later in June, when a series of giant locks come into operation. But while Chinese leaders celebrate, many of the 700,000 people displaced by the dam remain bitter, saying initial promises of better lives and higher compensation have not been kept.

"Thousands are refusing to evacuate their homes until they get the compensation due to them," said a peasant in Kaixian county, where over 100,000 are being moved.

Around 120,000 peasants have been relocated to 11 other provinces in coastal China, but many have returned, claiming they were cheated and cannot find jobs. "Instead of fields, we were offered wasteland to farm," complained another peasant from Yunyang county, who like thousands of others was forcibly relocated to Hubei province.

About 100 farmers who decided to return home staged a protest outside the Communist Party headquarters. Squads of heavily armed police arrived, and in the riot that followed, the protesters smashed up the offices of the migration department. Dozens were arrested and may pay heavily: peasants who have led protests, organised petitions or spoken to foreign journalists have been imprisoned for "disturbing social order".

"Corruption is everywhere in Chongqing [the region's main city]," said another farmer. "Most of the party secretaries and village heads have falsely reported the numbers of migrants and pocketed the money themselves. They are living well, but we are suffering."

Gan Yuping, deputy director of the project's construction committee, insisted the government was investing 100bn yuan (£7.4bn) for the relocation of inhabitants, and made sure their rights were respected. "The government is paying greater attention to the resettlement than to the project itself, because people are more important," he said.

When the gigantic project is eventually finished in 2009, the water will be 600ft deep and up to two million people will have been moved, making this the largest resettlement programme ever attempted. By then the dam will have 26 turbines in operation. The 18,200 megawatts they are capable of generating will save China the pollution from burning 50 million tons of coal a year.

Yet many still fear the dam will be an environmental catastrophe. "Decades of accumulated trash from villages, hospitals and cemeteries, highly toxic waste material from factories and the corpses of millions of poisoned rats are all still there," said Dai Qing, an environmentalist.

The government says it has cleared four million tons of household, industrial and sewage waste, as well as the rubble from demolishing 12 million square metres of housing. It plans to invest £3bn in hundreds of sewage and waste disposal plants, but all the pollution from Chongqing and other industrial cities still goes straight into the Yangtze, making its water so poisonous that no one dares drink it or use it for agriculture.

If nothing is done, environmentalists warn, the Three Gorges could turn from an engineering marvel into a giant cesspit, filled with sediment washed down from the deforested slopes of Tibet's great mountains.