Shanghai, November 26:

China’s environmental watchdog plans to impose stiffer penalties on firms caught polluting the nation’s endangered drinking water supply, state media reported today.

Maximum fines will be raised five times to 500,000 yuan (67,600 dollars), the Xinhua news agency said, citing a draft published by the State Environmental Protection Administration (SEPA).

In special cases, some companies found guilty of polluting water supplies could face a fine of one million yuan, although that will depend on the damage caused, the report said. Firms that contaminate drinking water could be hit with fines equal to 20-30 per cent of the economic losses caused by their polluting activities, including the clean-up costs. Cleaning up China’s filthy environment has emerged as one of the country’s most pressing problems after nearly three decades of unbridled industrial development.

More than 70 per cent of the country’s waterways and 90 per cent of its underground water is polluted, previously released government figures show.

More than 300 million people in rural China do not have access to clean water, according to the government.