I think the World Bank will support this project

President Vladimir Putin

The Pearl of Siberia, as the lake is known, is a United Nations world heritage site, and contains an estimated one-fifth of the world's surface unfrozen fresh water.

But for the past 35 years, a paper factory has been slowly but surely polluting the lake.

Waste not wanted

Russia TV reports that the Baikalsk Paper Works pumps 140,000 tonnes of waste water into the lake every day.

Speaking with the plant's director, Valery Glazyrin, on television, the Russian leader said that he would discuss the loan with senior bank officials.

"I think they will support this project," Putin said. "The only issue is into which programme it fits."

Lake Baikal is a world heritage site

The factory has asked the bank for a $22m credit to modernise the production process.

Mr Glazyrin said that after the proposed switch to closed-loop technology, the plant would no longer dump waste into the lake.

"There will be no waste water flowing into our famous local lake," he said.

"All the issues on our side and on the side of the government have been resolved. Now we need the decision of the World Bank."

Balancing act

Environmentalists have fought against the mill's pollution for years, but legal action has failed to close the plant, which provides 3,000 jobs in Baikalsk.

Given the devastating effect that the mill's closure would have on the town of 17,000, it is generally accepted that a self-contained manufacturing process would give the best balance between man and nature.

The environmental group Greenpeace has been a vocal opponent of the factory, but in recent years has eased off earlier protests that involved blocking the plant's waste pipes.

BBC Monitoring, based in Caversham in southern England, selects and translates information from radio, television, press, news agencies and the Internet from 150 countries in more than 70 languages.