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(Geneva) New dams intended to provide cheaper power and support irrigation systems are destroying important water sources and causing economic disruption, a leading environmental group said in a report released Monday.

The report by the World Wide Fund for Nature noted that dams can destroy wetlands, which hold water like sponges and cannot be replicated by manmade storage facilities.

"The world's ailing rivers and the communities that depend on them face a bleak future without prompt action," WWF said in the report, which assessed the environmental effects of six dam projects around the world.

Dams flood valleys, destroy fisheries and are threatening endangered species such as the Iberian lynx and jaguars, whose natural habitats in valleys can end up under water.

"As the energy and water crisis tightens, we need to ensure that we choose the solutions with the least environmental damage and the greatest social benefits," said Ute Collier, author of the report.

A $30 million dam in Belize was designed to reduce electricity imports, but local people have seen prices rise since its completion, the report said. It also has flooded 2,500 acres of rain forest.

A project in Iceland, meanwhile, will likely flood hundreds of nesting sites of the rare pink-footed goose and destroy some of the habitat of Iceland's only reindeer herd, the report said.

In Laos, about 5,700 villagers will have to be resettled because of a dam project that has been approved by the World Bank. At least 50,000 people who rely on the river for their livelihoods will also be affected as water is diverted.

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[ 15 November 2005: Message edited by: Hephaestion ]