Farming families around Lake Taihu (Lake Tai) are polluting the water courses flowing into the lake, with environmental protection authorities threatening farm closure.

However, local governments have said it is too expensive to find compensation for them.

Environmental authorities have told Chinese media that water pollution remains a “major problem” in the watershed which is home to 40 million people in the east of the country.

They say farms are a “significant source of pollution”, equal to 6.4 million pigs.

Sources added that a pig produces seven times more sewage than a human being, meaning farm sewage is equal to that generated by 40 million people.

"To close the farms, local governments must compensate the farmers," said Wang Yunxian, director of the Changzhou branch of the general office. "It's their source of income and how they support their families. Local governments cannot afford compensation to the farmers."

Farm closures enforced by the Yixing government required 100 million yuan last year around one of the lake’s tributary rivers.

In 2007, agricultural fertiliser and household chemicals caused a “massive” algal bloom in the lake, threatening the tap water of 2 million residents in lakeside Wuxi.

This is according to China Daily, which reports the city has pumped over 5 billion yuan into sewage and garbage collection and disposal systems.

The Jiangsu government has allocated 2 billion yuan annually for water pollution management.

It reported the issue has improved since 2007.