Water flow was stemmed on the river on Thursday as the last truckload of rocks was dumped into the river at the dam site -- a gorge on the border of the southwestern provinces Yunnan and Sichuan, the People's Daily said.

"It marks the end of the preparatory work and the project will from now on enter its main construction phase," the newspaper said, referring to the start of the building of the dam.

The Yangtze was last blocked in 1997 for the 18.2 GW Three Gorges Dam, the world's largest hydropower project, it added. The Xiluodu project will have an installed capacity of 12.6 GW.

A 6 GW power station, Xiangjiaba, is also under construction on the Jinsha and is expected to be finished in 2015.

China has encouraged development of hydropower stations, which account for about a quarter of China's installed capacity, as renewable, relatively clean alternatives to thermal plants.

The government also argues that hydropower stations help alleviate poverty and spur economic growth in the country's underdeveloped southwest, which is rich in water resources.

But some Chinese and international conservation groups have decried these projects, saying they damage the environment and cultural relics and bring few benefits to millions of residents who have been forced to relocate.

China's environmental watchdog ordered the state-owned Yangtze River Three Gorges Project Development Corp to halt the construction of the Xiluodu dam in early 2005 until it completed an environmental impact assessment for the project.