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More than 20 tourist groups from Hong Kong have canceled tours to Wuxi, and the economic loss incurred is estimated at about 100,000 yuan (about 13,000 US dollars), said Jiang Yueqing, president of Wuxi China International Travel Service.

"The effects are only beginning. We will continue to see a sharp fall in the number of tourists, not just in Wuxi, but in the east China area in general," Jiang said.

Wang Jieping, director of the city tourism bureau, said over the past decade, the city has built its communication around the Taihu Lake, one of the country's main freshwater lakes, and the crisis has severely tainted that image.

"The effects of the lake crisis will be similar to SARS (severe acute respiratory syndrome) four years ago: recovery won't happen overnight," Wang said.

Wang said the blue algae is likely to come back as the temperature rises, and governments need to take practical measures to curb its growth.

The Taihu lake crisis started last month, as low water level and the accumulation of waste and untreated sewage triggered the rapid growth of blue algae, turning the water putrid and cutting freshwater supply to more than 2 million residents.

Authorities diverted water from the Yangtze river to flush out the pollution, and used chemicals to treat the algae.

Workers have collected 6,000 tons of blue-algae from the lake, and local health authorities said tap water finally meets drinking standards.

China's main environmental protection body has vowed to strengthen supervision and close all factories that are discharging pollutants into Taihu Lake.