By Michael Bristow
BBC News, Beijing
Fewer than half of the project's hydropower generators are working
China has postponed a plan to raise the Three Gorges reservoir to its ideal height of 175 metres due to a lack of water, the firm running the dam said.
There has been less water than expected flowing into the reservoir from the upper reaches of the Yangtze River.
More water than anticipated has also been let out of the reservoir because of drought further down river.
Filling the reservoir will mark the end of the multi-billion-dollar project that was started in 1993.
China's Three Gorges Corporation began raising the level of the 660km-long (410 miles) reservoir in September.
The plan was to reach 175m - a level at which the project becomes fully operational - in late October or early November.
But officials have admitted that they are now not sure when that will happen.
"Less water flowed into the Three Gorges in October and this exacerbated our water shortage problems," said a statement from the corporation.
Officials said 35% less water flowed into the reservoir in October compared to the same month in 2008.
The statement added: "There was also a larger demand than expected for water further down the river for the environment, water supplies and shipping transport."
There has been a drought in the provinces of Hunan and Jiangxi, leading to calls for more water to be released from the reservoir.
The reservoir needs to be 175m deep for the project to fully meet its roles of providing electricity, preventing floods and ensuring navigation.
The current water level is about 171m - but at that level only 11 of the scheme's 26 hydropower generators are operating.
But the lack of water is not the project's only problem.
Environmentalists have long pointed out that the changing height of the reservoir could lead to landslides along its banks.
That is something the corporation admits is true.
"Landslides are inevitable in areas near the reservoir as water levels change," said a spokesman for the Three Gorges Corporation.
The Three Gorges project is the world's larges hydropower scheme. It has displaced 1.3 million people and submerged 13 cities.
Officially the infrastructure project has cost $27.2bn, but others believe the real price could be much higher.
The project was championed by former Chinese leader Mao Zedong, but it has always had its fierce critics.
"The Three Gorges Dam is a model of the past," said Peter Bosshard, the policy director of International Rivers, a California-based non-governmental organisation that seeks to protect rivers.
"There are smarter ways of generating energy and managing floods than by building outdated mega-projects."