"There is another reservoir at the same factory that represents spillage risks, and experts are overflying the area to assess ways to prevent further damage," said an official with Rio de Janeiro state's Feema environmental body.

A second reservoir at the Cataguazes de Papel factory contains some 700 million liters of toxic waste from the pulp bleaching process, mainly caustic soda.

Officials said rain could easily cause more spillage.

Television footage showed the rivers Pompa and Paraiba do Sul covered with a white foam, dead fish floating belly-up, and people queuing for water from trucks.

"We have had big oil spills but they don't bring as much damage. This one really alters the ecology and economy in the region," said a spokesman for the government's Ibama environmental agency.

Fishing and agricultural irrigation have been banned in the affected areas, while ecologists said it could take the ecosystem up to 15 years to recover.

International conservation group WWF blamed the contamination on a lack of preparedness by state authorities to combat ecological disasters. It said the residual impact of the spill was still unknown and there were also health risks.

"It is the worst accident we have on record," said WWF Brasil Water For Life program coordinator Samuel Barreto.

But Feema officials said damage from a 1982 heavy metals contamination in Minas Gerais from the Paraibuna de Metais company may have been of similar proportions.

State oil giant Petrobras (PETR4.SA) (PBR.N) had been asked to lay floating barriers where the river meets the sea. Bathing on some beaches has also been banned, officials said.

Hydroelectric plants on the two rivers were preparing to double water drainage from reservoirs to dilute toxic waste.

Environmental authorities closed the factory pending an investigation. Criminal charges could follow.