The firm expects construction to start in early 2008 at Dongtan, a development on an island outside Shanghai where all energy will be renewable, no gasoline-fuelled cars permitted and farms will grow organic vegetables for local consumption.

The first wave of residents and staff for a sustainable development institute will move into the project by the end of the decade, Head told Reuters in an interview, dismissing accusations that the project would stumble without subsidies.

"The economics and commercial viability are strong", said Head, who was in the northeastern Chinese city of Dalian for the World Economic Forum.

Because Beijing is heavily promoting greener growth, the sustainable but fully commercial project -- a venture of the Shanghai Industrial Investment Corporation -- got permits for much more construction than they would normally be allowed.

"If you can get twice as much saleable area on a site, the cost of the buildings is irrelevant, as essentially the value of the land is much greater," he added.

They are working with a global property firm to market the project and expect the initial 8,000 population to swell to 80,000 by 2015 or 2020, he added.

Eventually the island should house 400,000, people, linked to Shanghai with a road and metro line along a massive bridge and tunnel, although it is not designed as a greener commuter suburb.

"We aim to have it be a place where people can live and work, not just a suburb of Shanghai, because travelling creates resource depletion," Head said.

NEW MODEL

Arup also expects to start construction within 6 months to a year on Langfang, a sustainable town in Hebei province, which surrounds capital Beijing and is packed with polluting industry and plagued by water shortages.

"In many ways it is more important than Dongtan, because its more typical of regeneration and development projects in China."

Half way between Beijing and the port city of Tianjin, the area is home to around 100,000 people in a cluster of villages, but the eco-city will be home to 400,000.

Often, as rural areas in China develop, old streets and homes are cleared away and an infrastructure grid laid out for businesses and home to fill in.

The Langfang project, funded by both public and private money, will instead keep the footprint of the current villages, separated by pear orchards and poplar groves and connected by buses or trams and cycle paths.

Waste water from the city will be cleaned to use in irrigation, and organic waste will be converted into compost, to help boost the rural economy as the city develops.