The main beneficiaries were often western construction companies which gained millions of pounds worth of business paid for by aid agencies such as the World Bank, and consequently added to the debt of some of the poorest countries.

But despite condemning ill-thought-out immense projects that were bulldozed through without consulting those whose homes and jobs they destroyed, the commission said dams are not all bad.

Properly planned, with the consent of those most affected, and provided that alternatives are investigated and found unacceptable, dams still have a place in providing development for poorer countries.

The report, launched by Nelson Mandela in London, is the first definitive assessment of big dam projects and is expected to act as a blueprint for further developments. It recommends that export credit guarantee departments do not support projects unless a number of conditions are met, including prior consent of those affected, proper compensation schemes and environmental safeguards. The commission is also concerned about conflicts arising from states building dams on shared rivers without consulting downstream neighbours.

One surprise is that the report says claims that dams provide "clean" electricity and do not add to global warming are not always true. Some dams that drown forests and create large quantities of gas because decaying vegetation may produce as much greenhouse gases as generating electricity with fossil fuels.

The number of people displaced by dams is estimated at between 40m and 80m, most of them in China and India. The costs of dams were on average 50% above their original estimate. Some designed to reduce flooding made it worse, and there were many unexpected environmental disadvantages, including the extinction of fish and bird species. Half the world's wetlands had been lost because of dams.

Kader Asmal, the commission chairman, said: "In general countries that have paid a high cost to secure benefits while the people affected have paid an unacceptable and often unnecessary price. It has not been equitable or efficient. We are not in the business of moral or religious condemnation, we are trying to point out that shortcomings are not automatic and can be avoided".

Steve Fisher, from the Dams Commission, said they showed that dams should be approved only if they demonstrably met the goal of human development. Small scale energy schemes, manufactured and constructed locally, created employment and reduced dependence on foreign capital, technology and expertise.

Further information available at: