The China Three Gorges Project Corp is refusing to obey a government order to stop construction of one of its giant dams, the Chinese state press has said.
Part of the massive Three Gorges Dam project was told to stop
The builder of the Three Gorges Dam is continuing work on the sister Xiluodu dam, said the Beijing News.
The Xiluodu dam is one of 30 such large-scale construction projects called to a halt because of a lack of proper environmental checks.
The Beijing News said the company may instead choose to pay a fine.
The firm has also ignored orders to stop construction at two of its other projects - the Three Gorges Underground Power Plant and the Three Gorges Project Electrical Power Supply Plant.
So far, only 22 of the 30 construction projects targeted by China's State Environmental Protection Agency (Sepa) for having not carried out mandatory environmental impact assessments have complied with its shutdown order.
The China Three Gorges Project Corp could now face a fine up to 200,000 yuan ($24,000; £12,700).
Last week, it denied that its projects violated regulations.
"The Three Gorges Corporation has all along abided by the law and have built our projects in accordance with the law," it said.
The Sepa order comes as the Chinese government appears to be trying to cool the country's booming economy.
Previously it has encouraged construction of new electricity generating capacity to solve chronic energy shortages, which forced many factories into part-time working last summer.
China's economic growth drove up demand for electricity by 15% in 2003, with demand forecast to increase by a similar amount during 2004.
China increased its generating capacity by more than 10% in 2004 to a total of 440,000 megawatts (MW), according to the International Energy Agency.
The Xiluodu Dam is designed to produce 12,600 MW of electricity, and is being built on the Jinshajiang - or "river of golden sand" as the upper reaches of the Yangtze are known.
It is a sister project to the main Three Gorges Dam downstream where more than half a million people have had to be relocated, drawing criticism from environmental groups and overseas human rights activists.