China Huaneng Group, the country's largest power producer, and China Guodian Group are allowed to continue their projects in four highly polluted industrial cities as long as the individual projects meet environmental standards, said the State Environmental Protection Administration (SPEA).

The two power suppliers, along with Datang International Power Generation Co Ltd and China Huadian Corp were banned in mid January from being involved in new projects in the cities of Tangshan, Luliang, Liupanshui and Laiwu. China Power Investment Corp, the other top-five power supplier, escaped the ban.

The four companies were among 82 power, steel and metallurgy projects worth 112.3 billion yuan (US$14 billion) banned nationwide after they failed to follow an environmental impact assessment rule, a mechanism designed to prevent pollution in advance.

"It's to enhance execution of the environmental laws and meet the emission reduction targets for the 11th Five-Year Program (2006-2010)," said Pan Yue, deputy director of SEPA, in a statement.

According to Pan, China Huaneng and China Guodian have shut down their polluting units, mostly small generators and those without desulfuring devices. Officials who were responsible have also been "punished by the companies".

Chinese authorities are trying to avoid a repeat of 2006 when the country missed a target to reduce key emissions by two percent as the economy grew faster than expected,.

The environmental authorities said emissions of sulfur dioxide, the chief cause of acid rain, grew to 25.9 million tons in 2006, up 1.8 percent from 2005. China aims to reduce major emissions by 10 percent between 2006 and 2010.

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