It would take five to six years to build the dam and EGAT was talking to Thai and foreign firms, including Chinese, to take part in the construction, EGAT chief executive Kraisi Karnasuta told reporters.

He did not disclose the cost of the project, but said it would be cheaper if the Chinese agreed to invest as they could shift machinery used in building a dam in China near the Myanmar border.

"The project will benefit the two countries as they both can strengthen their energy security and use low-cost electricity," Kraisi said.

Environmentalists and Myanmar ethnic groups disagree, saying hundreds of thousands of people would have to be displaced in a region fought over for decades by ethnic insurgents and Yangon troops.

"Preparations for the construction, including securing the dam sites and clearing the flood areas, have already caused gross human rights violations and massive population displacement," the anti-Yangon Salween Watch said on its www.salweenwatch.org Web site.

"In Burma the dams will be used by the military dictatorship for further oppression of its people," the Thailand-based group said referring to Myanmar's former name.