MAILUU-SUU, Kyrgyzstan (Reuters) - Hidden in a remote Central Asian gorge, thousands of tonnes of radioactive waste are one landslide away from contaminating the water supply for the whole Ferghana valley, home to millions of people, environmentalists say.

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Neglected for decades by the Soviet Union and then Kyrgyzstan, uranium ore dumps near the town of Mailuu-Suu must be urgently reinforced to prevent disaster, according to the European Commission and European Bank for Reconstruction and Development (EBRD) which are raising funds for the project.

“There are 14 million people in the Ferghana valley and in the event of a natural disaster water may wash away the tailings into the Naryn (Syr Darya) river which will be a tragedy for the whole valley,” says Bolotbek Karimov, an environment researcher based in the southern Kyrgyz city of Osh.

Once known simply as Mailbox 200, the town was founded in 1946 under a secret Soviet uranium mining program which employed de facto prisoners - people of politically suspect ethnicities such as Germans and former Red Army soldiers found guilty of surrendering in World War Two.

By 1968, when mining operations in the area ended, they had produced more than 2 million cubic meters of tailings, or mine dumps, which were hastily buried on mountain slopes along the Mailuu-Suu river.

The river flows down into the Ferghana valley, one of the most densely populated areas in Central Asia, now divided among Kyrgyzstan, Uzbekistan and Tajikistan. In 1958, a dam at one of the tailings failed after heavy rainfall and an earthquake, releasing thousands of tonnes of radioactive waste.

The Soviet Union never published a detailed damage assessment report on the incident, but environmentalists say it not only poisoned people, cattle and fish, but also contaminated rice fields downstream.

Mailuu-Suu itself is a scary illustration of what could happen to the Ferghana valley if the dumps are washed into the rivers: cancer rates here are 50% higher than the national average, congenital diseases such as Down’s syndrome are also more widespread and virtually everyone has a thyroid disease.

Ignoring warning signs, some residents graze their cattle, sheep, goats and horses on the soil which covers the tailings, barbed wire fences around those areas having been knocked down decades ago.

“We offered relocating the people, but they refused. Home is home,” says Rakhmanbek Toichuyev, another Osh-based researcher.

Some 30 million euros need to be raised in order to reinforce or relocate the Mailuu-Suu dumps and dispose of other hazardous materials in the town of 20,000, European Commission and EBRD officials say.

Another 40 million euros will be required for a similar clean-up in neighboring Tajikistan where a similar site was also used to mine uranium in the Soviet era.