Insiders say that the breakthrough is significant for the world 's most populous country which now faces water shortages.

A cooperative memorandum of the project was signed Thursday in Dalian between the coastal city of Yingkou and China Beida Jadebird Group, a Beijing-based high-tech company.

Professor Tian Jiafu, chief engineer of the group, described it as a more economic and safer way to apply nuclear power. "What makes the project distinctive is that it operates under normal pressure," said the former head scientist of nuclear power at Tsinghua University, often called China's equivalent of the Massachusetts Institute of Technology.

According to the agreement, a deep-water reactor under normal pressure of 200 megawatts will be established in Yingkou. The initial phase with 35 million yuan (US$4 million) investment would provide heating for a building area of five million square meters during winter. It can also desalinate 3,000 tons of sea water daily when no heating is required. The daily capacity is expected to amount to 80,000 tons.

He said north China's coastal areas had the facilities to develop the new technology. "It will be particularly useful for medium-sized cities," he added.

Such reactors have already been tested in some cities and labs in other countries where they had proved safe, but only in trials.

Professor Tian was optimistic that his team could ensure the safety and reliability of the reactor.

The application of used fuel from nuclear power stations lowers the cost and a reactor under normal pressure was less expensive than under high pressure.

The scientist and his company were upbeat about future applications. He said that besides the competitive cost, the energy would ease environment problems in north China where winter prevailed for four to six months.

The reactor in theory is able to replace about 130,000 tons of coal burned every year, reducing immensely waste gases.

In the meantime, the new project is being considered for water producing.

China has the world's worst water shortages. More than 300 cities in this country face shortages with 110 reporting severe problems.

( June 21, 2002)