BEIJING - China has sacked or otherwise punished five officials for dereliction of duty after green algae covered the country's third largest lake, prompting a drinking water crisis for millions, a newspaper said on Monday.

In late May and early June, Taihu Lake in the eastern province of Jiangsu was struck by a foul-smelling canopy of algae that left tap water undrinkable for more than 2.3 million Wuxi residents and prompted a run on bottled water for days.

A vice minister of the State Administration of Environmental Protection said on Tuesday the Taihu crisis was both a natural and manmade disaster, blaming chronic pollution on chemical plants near the lake.

Algae blooms can develop in water that is rich in nutrients, often because of run-off from heavy fertiliser use, industrial waste and untreated sewage.

The five officials received administrative demerits or dismissals for "inadequate work" or "dereliction in supervision" when dealing with the pollution, the Oriental Morning Post said.

The officials were all from Yixing, which is under the jurisdiction of Wuxi and on the west side of the lake, and included a vice head of the local environment watchdog, the Shanghai-based newspaper said on its Web site (www.dfdaily.com).

State television had shown "appalling footage" of Yixing chemical plants pouring untreated waste water directly into the lake even at the height of the algae crisis, the newspaper said.

Tap water returned to normal in Wuxi after emergency measures such as diverting water from the Yangtze River and seeding clouds to provoke rainfall.

Wu Lihong, an environment activist from Yixing and a long-time whistle-blower of Taihu pollution, is to stand trial on a charge of blackmail this month, a charge some say was trumped up by vengeful officials.