XINGZI, China - Tao Jingun's graceful wooden fishing boat sits atop a vast, shell-studded basin that was the bottom of Poyang Lake just months ago but now is a dry ocean of green grass because of China's worst drought in decades.

As Poyang shrinks to a tenth its usual size, crops wither and millions of people go thirsty, critics point to the gargantuan Three Gorges Dam as one cause, making it a symbol of the risks of the country's penchant for extreme engineering projects dating back to the Great Wall of China.

"This is the least water I've seen in over 30 years. There's nothing we can do," said Tao, a thin, congenial man who usually makes up to about $6,000 selling his annual catch from Poyang but this year expects to earn "basically nothing."

"I hope the government will let some more water out of the Three Gorges. If some water comes we can at least do a little work," said Tao, whose crayfish traps and nets are stashed in his village farmhouse.

Many villagers and some scientists suspect the dam not only withholds water from the Yangtze River downstream, but could also be altering weather patterns, contributing to the lowest rainfall some areas have seen in a half-century or more.

The government denies that Three Gorges can cause droughts but has acknowledged some of its environmental problems in a debate that highlights China's reliance on such showcase projects to sustain its economic boom.

The Three Gorges Dam is the world's biggest hydroelectric plant, completed in 2006 as a way to control flooding along the Yangtze and generate massive power for the country's ravenous industries.

The government already has used up 80 per cent of the reserves in the 660-kilometre-long reservoir by releasing extra water to relieve drought conditions downstream.

Still, the Yangtze's levels have fallen enough to threaten shipping both upstream and downstream as far as Shanghai, where high salt tides threaten drinking water supplies for its 23 million residents.

Rolling blackouts worsened by waning hydroelectric capacity are expected to deepen in the hottest days of summer. As farmers abandon their dried ponds and fields, prices for food are surging, defying Beijing's efforts to bring down already stubbornly high inflation.

"Things changed after the Three Gorges," said Fan Guofeng, who has spent 30 of his 46 years living beside the Yangtze in the city of Jiujiang.

The drought may abate when belated summer rains finally arrive, but overall China lacks enough usable water to sustain its 1.3 billion people.

"It really boils down to China wrestling with sustainability in the broader sense," said Bob Broadfoot of the Economic and Political Risk Consultancy, who has worked on projects across China for more than 30 years.

"The question really is whether China's high growth rate model is really sustainable?"

Last month, the government admitted that the $23 billion Three Gorges project has caused a slew of environmental, geologic and economic problems. Urgent action is needed to reduce risks of natural disasters such as landslides and alleviate poverty among the 1.4 million people forced to relocate, the State Council reported.

The unusually forthright assessment coincided with a flurry of speculation that the dam may help cause drought. The debate is sensitive for China's leaders: Traditionally, the legitimacy of imperial dynasties rested in part on their abilities to harness waters for irrigation and shipping.

"No evidence supports the theory that the Three Gorges causes droughts," said a recent commentary in the state-run People's Daily.

"We should not blame the Three Gorges Dam for every extreme weather event. In fact, the drought would have been even worse in the middle and lower reaches of the Yangtze River without the dam," it cited Zheng Shouren, a top engineer and one of the dam's designers, as saying.

A dam can affect local rainfall by altering the humidity of an area, experts say. The impact can vary depending on the lie of the land and other factors, and can become more unpredictable the larger the project, said Kenneth Pomeranz, a China water expert at the University of California, Irvine.

Pomeranz characterized a $150 billion plan to channel water from the Yangtze to parched Beijing and other fast-growing northern areas as a "big Rube Goldberg contraption."

"All the pieces have to work or you've got big problems. Obviously one of those pieces is that you have to have guessed right about the water supply in the Yangtze basin. If it doesn't have as much water as was thought, you have to give it up," he said.

China's ambitious engineering extends at least back to the start in the 5th century of the Great Wall, meant to keep out marauding northern nomads. The country's modern building frenzy -- dams, roads, airports, ports, reconstructed cities -- has laid the foundations for industrial affluence, but overstretched its resources.

The Yangtze lies in a rice belt, providing about a fifth of China's economic activity and two-thirds of its inland shipping. Despite periodic droughts, the 6,300 kilometre waterway is notorious for flooding that claimed hundreds of thousands of lives over the past century.

Since the dam's completion, the region around Poyang Lake has seen nearly annual droughts, turning some areas into dust bowls.

"It is deadly dry," said Li Gongfeng, 80, as he slowly hoed through his cotton patch in a straw hat, tattered army sneakers, baggy pants and shirt buttoned to his chin.

The seedlings, puny and ankle-high when they should be knee-high by this time of year, are his second planting.

"I put my heart into it and hope for the best. If I don't plant there's sure to be no harvest, but if I do there's still a chance," he said. "If there's no rain within a month it really will be hopeless."