Military officials believe each of the factories could produce up to 100,000 tablets of the drug per day, more than three times the current production rate.

Burma says the relocation is aimed at cutting heroin production

"We estimate 1999 output at 600m tablets," said an army spokesman, speaking from a hillside camp in Thailand's Chiang Dao district.

"This means that by next year they can produce more than two billion tablets of Yaba," (speed) he added.

The army's comments came followed an inspection of Thailand's borders with Burma and Laos, which are seen as an easy entry point for Burma-produced drugs.

The relocation which has angered the Thai authorities began in March. Burma's semi-autonomous United Wa State Army (UWSA), with help from the government, began relocating 50,000 people south from the Chinese border to towns in the eastern Shan state.

Stamp out

About 100,000 people are said to have been moved so far.

At the time, Burma's military government said the mass migration was aimed at helping to stamp out opium production by moving people away from areas where they used to grow poppies.

But Thai officials claim the relocation programme is a thinly disguised move to boost the drug industry by bringing the supply closer to the markets in Thailand.

They also suggest that some Burmese ethnic groups, in particular the Wa, are using the drugs trade to raise quick money to fund the building of new towns in their territory.

Thai officials fear more drugs will flood across the border

Burma says it is fighting hard against the drugs trade and destroyed millions of dollars worth of narcotics in a ceremonial drugs burning on Friday.

But the United States and many other Western states remain unconvinced and have refused to fund any anti-narcotics programmes in Burma.

They have also imposed economic and political sanctions on Burma because of its military rule, alleged human rights violations and accompanying tolerance of the drug trade.

US drugs czar Barry McCaffrey, who has just completed a tour or the region, praised Thailand's efforts to fight the drugs trade.

Thailand was, he said "one of the few countries with "the political will and means" to tackle the issue.