Data reported by China's regional governments indicates a national goal to reduce China's two main pollutants by two percent in 2006 has been reached, but calculations by the top environment watchdog show they actually grew two percent, Xinhua news agency said, quoting an environment official.

"The figures on pollution control reported by local governments dropped remarkably this year, while the real environmental situation continues to deteriorate," said the unnamed official with the State Environmental Protection Administration (SEPA).

"The inaccurate figures were caused by insufficient supervision of the local governments and possible fabrication."

The two pollutants are chemical oxygen demand, a measure of organic pollutants in water, and sulfur dioxide, Xinhua said.

The official's comments mark the latest in a series of alarms by SEPA, which has said central-government efforts to curb the environmental damage from China's chugging economy are being overwhelmed by the local pursuit of economic growth at any cost.

Major Chinese cities are routinely enveloped in choking smog so thick it affects air travel and SEPA has said half of China's rivers are severely polluted and one-third of the country affected by acid rain.

Billions are being invested to upgrade environmental facilities and penalties for violations are being increased.

But collusion between industry and local-level officials, who often have a financial stake in economic growth, is hindering progress, SEPA has said.

"Illegal small chemical plants, paper and leather mills are still being set up. Many outdated technologies, which should have been replaced, are still in use," SEPA Director Zhou Shengxian said in a report on Tuesday to China's legislature.

He said environmental offices in China's far-flung provinces are undermanned, poorly equipped and their staff face harassment and demotion by higher-ups.

SEPA plans to send teams to the provinces to examine the local statistics, Xinhua reported.