By Alex Kirby BBC News Online environment correspondent

China and the UN are preparing an ambitious plan to prevent any repetition of the disastrous 1998 floods on the Yangtze river.

The work, which will cost $10m (�7m), will restore lost lakes, and reduce deforestation and erosion.

It is designed to save lives and livelihoods, to slow damage to the environment and to safeguard wild species.

The pilot phase is expected to start in two months' time. The scheme has been developed by Chinese researchers and colleagues from the United Nations Environment Programme (Unep).

Pandas should gain from the river plan

It follows a visit to China in 1999 by a Unep team to establish the causes of the 1998 floods. The Yangtze, at 6,300 km (3,900 miles), is Asia's longest river and the world's third longest.

The floods were reported to have killed 3,656 people, destroyed 5.7 million homes and damaged seven million more, and forced 14 million people to move to new areas. The economic losses were put at $31bn (�21bn).

The team identified three factors which had significantly worsened the impact of heavy rain:

• deforestation and overgrazing, sharply reducing the capacity of forests and grasslands to retain water;
• loss of lakes and wetlands, cutting the capacity of the river's middle and lower reaches to store water;
• rising erosion rates, causing rivers and wetlands to fill with silt.

Troops lay sandbags to hold back Yangtze

And the bed of Dongting lake, which receives about 1,290 million cubic metres of silt and soil annually, has risen more than a metre since 1955.

The plan worked out with China aims to return farmland to natural forests, grasslands and other habitats in the Yangtze's upper and middle reaches, in the hope of reducing erosion as rainwater is retained more easily.

Rich in wildlife

It will also involve restoring thousands of lakes and natural drainage systems.

Unep describes China as one of the world's richest countries for wildlife, with more than 3,000 higher plant species and over 6,000 mammals, birds, amphibians and reptiles.

Species it expects to benefit from the plan include the giant and red pandas, wild yak, and Yangtze river dolphin, or baiji, as well as the 400 million people who live in the Yangtze basin.

The scheme involves the provinces of Sichuan, Yunnan, Guizhou and Guangxi, the cities of Chongqing and Chengdu, and Tibet.

If it is approved by the Global Environment Facility, work on the full project should start in May 2003.