A Chinese water company has won Rmb2.3m ($285,000, ？241,000, £166,000) in compensation from two companies and an irrigation bureau blamed for one of the worst incidents of pollution to blacken the water of the fabled Yellow River.

The compensation payment reflected efforts to use the legal system as well as bureaucratic controls to reduce pollution but it also highlighted the environmental pressures on the waterway considered the cradle of Chinese civilisation.

State media said the award, hammered out after three months of mediation by a regional high court, was the first time polluters had been successfully forced to pay damages for harming the Yellow River.

The mediation followed a verdict by a local court last year that held the two paper factories and irrigation bureau responsible for the 50km stinking slick of black pollution that disrupted water supplies to the Mongolian city of Baotou for more than four days in mid-2004.

The 5,464km river is a vital source of water for many of the 50 cities and 420 counties along its course across China's arid north. In recent years its water has often been too dirty to use and it has repeatedly dried up on some stretches.

The case brought by the Baotou water company has been seen in the region as setting an important precedent for other polluters. "This is the first time that companies in Inner Mongolia have been ordered by a court to pay compensation for polluting the Yellow River. The case is a legal 'bright sword' defending our mother river," a newspaper said last year after the initial verdict.

"The law has again warned the world that companies cannot merely pursue economic benefit but must also have a sense of responsibility toward society," the paper said.

However, the settlement was lower than the Rmb2.88m originally awarded by a Baotou court and far less than the estimated Rmb139m in economic damages caused by the slick, which was caused when 1m cubic metres of waste water from a holding pond was dumped into the Yellow River.

The slick affected 400km of the waterway, which is yellow because of the sediment it carries, and may have killed up to 45,000kg of fish, including most of the shrimp, carp and catfish on the Baotou stretch.

Chinese rivers remain vulnerable to such disasters. In November, a spill of toxic chemicals on the Songhua river caused widespread damage and forced the north-eastern city of Harbin to turn off water supplies for five days.

Last month, a state-owned smelting works was blamed for a spill of toxic cadmium that threatened water supplies to southern Chinese cities near the Beijiang river in Guangdong province.

In south-western China's Sichuan province, thousands of people briefly went without running water after pig excrement from a commercial farm polluted the Tiaodeng River.

China has spent large sums attempting to clean up the country's main waterways but progress has been limited because of local protection of polluting industries that are often large employers and taxpayers.