WUXI - Officials promised swift steps on Friday to clean up China's third-largest lake after algae, floating like green oil paint, choked off water to this city of more than 2.3 million amid a public outcry about pollution.

Taihu Lake in Jiangsu province has been struck by a rapidly spreading canopy of algae which has left water supplies for nearby Wuxi undrinkable.

Convoys of trucks have been bringing bottled water for residents, with the supermarket price slashed by government order to stop profiteering.

Queues were forming at some shops and some stall-holders were charging extra for the water -- and charging separately for the bottle that contained it, one resident said.

Thick slicks of the algae hugged the lake edge, giving off an overpowering smell of rotting meat. A stone thrown into it took a long time to sink. The tap water in the hotel had the same smell.

"The government said it is safe to drink boiled water," said a 65-year-old retired worker surnamed Wang. "But it has a green film on the surface. How can I drink it?"

Many of China's lakes and rivers are threatened by run-off from fertilisers, industrial waste and untreated sewage. Algae blooms can burst out in water that is rich in nutrients from farm and domestic run-off, which Taihu Lake has in abundance.

The provincial Communist Party chief, Li Yuanchao, said the water was improving as officials drew flows from the Yangtze River and stopped pumping in waste, according to a report posted by the State Environmental Protection Administration (SEPA) (www.sepa.gov.cn).

But he acknowledged the scare exposed deeper failings.

"In future development we must be determined to make stronger efforts to clean up Taihu Lake and ensure its water quality and safety," Li said. Small chemical plants around the lake must be closed and more waste water plants must be built, he ordered.

Xinhua, citing an official with the Ministry of Health, said the government planned to extend its drinking water monitoring network this year to include more rural areas.

A Wuxi official, Zhu Zhongxian, claimed the water was now safe -- despite the stench.

"Water quality on every indicator meets national standards and it's not toxic," the Nanjing Morning Post quoted him as saying.

Rockets containing silver iodide were fired at eight spots around the lake to induce artificial rainfall to help flush out the algae, Xinhua news agency reported.

But residents and media said the emergency steps exposed a long-term failure to protect lakes and rivers, battered by pollution and strained by population and economic growth.

In 2005, millions of residents of Harbin in northeast China had their taps turned off for weeks after a toxic spill.

The problem was a symptom of widespread environmental destruction threatening water sources, said one commentator.

"Along with our country's rapid economic growth there's been a constant build-up of pollution and checks on it have lagged," said the commentary on the Web site of the People's Daily, the Communist Party's newspaper (www.people.com.cn).

"Our country's environmental protection has reached a crisis point."

Ding Luhui, a sales manager of a lakeside property project, said clients had called him up to ask about the pollution and he was worried about cancellations.

"I can't see any effect on sales yet," he said. "But maybe it is too early to say."