BEIJING, (AFP) - Severe water shortages in China's parched north are being exacerbated by polluted groundwater which is increasingly being tapped to feed growing demand, state press said.

"The strain on water resources is increasing along with rapid economic and social development," Liu said at a water forum in central Henan province.

"This has created a potential, and in some ways direct, threat to the security of the environment and economy," he said.

China has 164 regions, covering some 190,000 square kilometers (76,000 square miles) largely in the north, where underground water resources are being tapped at unsustainable levels, he said.

About 400 of China's 600 largest cities are reporting shortages.

Water shortages have forced the government to approve multi-billion dollar plans to divert some 20 billion cubic meters of water to the parched areas from the Yangtze River.

Liu said that over 90 rivers in China have at times run dry in recent years, while the size of lakes across the country has decreased by 15 percent and wetlands by 26 percent since the 1950s.