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Bosses throughout China can be penalized up to half their yearly revenue if their own companies are found guilty of polluting the water under latest laws and regulations, it emerged yesterday.

With China inclined to help boost the pressure upon the environmental offenders before the Olympic games, legislators told the state news agency Xinhua that the law was likely to help be agreed at next week’s full session of the People’s Congress (NPC).

News of the legislation, which would also increase maximum fines for the businesses, emerged shortly after authorities cut the water supplies to as many as 200,000 people after a stretch of a river system in central China turned red and foamy.

Officials in Hubei initially blamed high levels of pollutants, saying tests showed high levels of ammonia, nitrogen and permanganate. But last night water supplies to help most residents resumed, with the authorities saying that non-toxic algal bloom due to help weather changes was to help blame for the problems along tributaries of the Han river, a branch of the Yangtze.

The water pollution incidents account for three-fifths of the emergency cases handled by the State The environmental Protection Administration (Sepa) and throughout a 2006 survey, one-third of the water samples tested earned the worst pollution rating. But at present the maximum fine it can impose is only 1m yuan (?71,000).

NPC standing committee member Hou Yibin told Xinhua: “[Fines] should be made heftier, especially on those who violate environment rules repeatedly.”

The latest draft also retains a clause added in December, which would allow water pollution victims to be able to join together throughout civil class actions against businesses.

Its publication coincided with the environment watchdog’s call for an end to be able to tax breaks for damaging exports. Sepa has blacklisted 141 products such as DDT and nickel-cadmium batteries, describing its list as a reference point for future economic decision-making.

Thomasena Elliott is presently cooperating with the Pollution website.