The news came as a shock to Texans, who were in Chihuahua to plead for repayment of about 456 billion gallons (2.07 trillion litres) of water from the Rio Grande border river that is owed under a 1944 treaty to south Texas farmers.

Texas officials last week said their farmers need that water.

The amount in dispute is more than the seven South Texas counties that receive water from the Rio Grande river consume in one year for irrigation and municipal and industrial use, said Carlos Rubinstein, Rio Grande Water Manager for the Texas Natural Resource Conservation Commission.

A recent study by Texas A&M University showed the gross economic impact of the water shortage on south Texas to be $498 million in lost revenue from farming, industry and other activities, he said.

"We need this water repaid, before something like this (pipeline) is undertaken," said Wayne Halbert, general manager of the Harlingen Irrigation District. "There are many farmers who are going to lose their livelihoods without the water it takes to irrigate their crops."

Under the 1944 Mexico-U.S. Water Treaty, Mexico agreed to allow 114 billion gallons (518.2 billion litres) of water to flow annually from Mexican streams and tributaries into the Rio Grande River for use by farmers in south Texas.

In return, the United States agreed to divert five times that amount out of the Colorado River and into Mexico each year, and has never defaulted.

MEXICO WATER DEBT SOARS

But since 1992, Mexico has defaulted repeatedly on the Rio Grande agreement and the backlog has grown to today's enormous water debt.

The United States and Mexico have been squabbling over the water ever since, with Mexicans saying they cannot repay the debt because they don't have the water to spare and Texans countering that they need it to irrigate 750,000 acres (303,00 hectares) of citrus, melons, cotton, sugar cane and other crops.

"We know we have an agreement with the United States, especially Texas, but you pay when you can pay," said Diana Silva, an aide to Chihuahua Gov. Patricio Martinez.

Chihuahua City has used large amounts of water to roll back the Chihuahua desert which encircles the city of more than 600,000..

Silva said the pipeline project is still in the planning stages, but construction could begin in June 2002. It is not yet clear how much water will be siphoned out of the reservoir, which is across the border from Presidio, Texas.

Silva said the pipeline is intended to provide drinking water for the people of Chihuahua City and surrounding areas.

"Our state is very dry right now. We need the water for drinking," Silva said, adding that the water from the proposed pipeline will not be used for agriculture or industry.