Determined to reduce dependence on foreign energy, Turkey vowed Tuesday to push on with an ambitious dam construction program despite the loss of financing for a key project and loud objections from environmentalists.

German, Swiss and Austrian creditors announced eaerlier in the day they were withdrawing from the Ilisu dam project on the Tigris river in southeast Turkey because Ankara had failed to meet conditions of the 1.2 billion-euro (1.7 billion-dollar) credit.

Turkey hit back by saying that the decision was "political" and underlined that it was determined to realize the Ilisu project, which opponents say will flood a millenia-old historic site and displace some 50,000.

Last week, Environment Minister Veysel Eroglu said Ankara would build the dam and its 1,200-megawatt powerplant with its own money if the loan were not released.

Observers say it is unlikely for Turkey to give up on plans for low-cost energy at a time when official projections estimate an annual 6.0 to 8.0 percent increase in the country's energy consumption.

Turkey is already a big importer of natural gas and oil, part of which it uses to produce electricity.

There are currently 172 hydroelectric dams in operation in Turkey with an overall capacity of 13,000 megawatts, which amounts to 17 percent of the country's electricity production, according to figures from the state-run hydraulic works directorate (DSI).

A total of 148 are under construction and there are plans to build another 1,400, which would enable Turkey to triple its hydroelectric production.

"At the moment Turkey uses only 30 percent of its hydraulic resources, but there are planned projects to increase it to 50 percent," said Sezayi Sucu, an enthusiastic engineer heading a major dam project in northeastern corner of Turkey.

"This figure is still rather low compared to the United States or Europe where the exploitation rate reaches 95 percent and 85 percent respectively," he added.

But some of the planned hydroelectric dams not only come under fire from environmentalists but are also criticised by neighbouring Syria and Iraq who say Turkish dams on the Euphrates and Tigris rivers reduce the flow into their territories.

Sucu works on one such controversial project in the Coruh River in the Black Sea province of Artvin, bordering Georgia, that involves the construction of 15 major dams -- two of which have already been completed -- and several dozen smaller ones.

Once completed, the project will provide one tenth of Turkish electricty production.

But one of the planned dams, the Yusufeli dam, has for several years has been at the centre of a legal war between the state and environmentalists trying to block its construction.

Opponents say the dam will not be profitable, will destroy endemic flora and fauna species and displace some 16,000 people in a region that has already been drained by years of migration.

"This project does not stand up on its feet: Just look at the reservoir of the nearby Borcka dam and you will see how much silt has accumulated there. In a few years, everything will turn into mud," said Bedrettin Kalin, a lawyer from a local environmental platform called the Fraternity of the Valleys.

Korol Diker from the environmental group Greenpeace blamed Ankara of ignoring the potential environmental impact of planned dams when it gives the go-ahead to the projects.

"The problem is that the environmental impact study system does not work properly in Turkey," Diker said, adding that Ankara often chooses to build big dams that are more environmentally destructive than smaller ones.

Local authorities reject the accusations and say the dam project will go ahead with national funding.

"The Yusufeli dam will be constructed with national fundings: either with local businessmen in a build-operate-transfer system or directly with state funding," insisted Cengiz Aydogdun, governor of Artvin.