Local prosecutors in Irkutsk have been ordered "to check the legitimacy of the activities of the paper and pulp mill," said the prosecutors in a statement.

The Baikal paper and pulp mill is owned by Basic Element, a holding company controlled by Oleg Deripaska, Russia's richest man according to Forbes magazine.

There are "serious concerns" about the "ecological safety" of the lake and the surrounding areas, said the prosecutor, adding that the investigation is under special control from Moscow.

The oldest and deepest lake in the world, Lake Baikal is classified by the United Nations Educational, Cultural and Scientific Organisation (UNESCO) as a world heritage centre.

The lake contains 20 percent of the world's total unfrozen fresh water reserve and some of the world's most unusual fresh water flora and fauna.

Environmentalists have long warned about the dangers of pollution from the mill.

The prosecutor's office said Thursday that the mill was illegally dumping waste in the lake and was breaking environmental norms in the area, citing information from the Russian environmental watchdog, Rosprirodnadzor.

The mill is also accused of using the lake's resources without permission, the statement said.

There are "400 tonnes of waste on the factory's territory," Oleg Mitvol, deputy head of Rosprirodnadzor, told AFP.

Plans to modernize the mill have been delayed time and again in recent years.

The World Bank offered a credit of 22 million dollars for improvements, including creating a closed water cycle system which would stop dumping in the lake.

"This project was not carried out and the factory continues to function illegally", said Mitvol.

Built in 1966, the mill exports most of its production to China.

No one at Basic Element would comment Thursday.

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