Deadly clashes between Myanmar troops and ethnic minority rebels near the Chinese border have spread with hundreds, possibly thousands, of people fleeing their homes, reports said Wednesday.

Heavy fighting around a large hydropower project being built in northern Kachin state to provide power to China has erupted sporadically for almost a week after soldiers tried to push back Kachin Independence Army (KIA) troops.

Reports from the Kachin News Group (KNG), which has close contact with the rebels, suggested fighting had also broken out in northern parts of nearby Shan state late Tuesday.

KNG editor Lahpai Naw Din, who is based in Thailand, told AFP that more than 1,000 refugees had fled the fighting in Kachin and massed in rebel-held areas near the border between China and Myanmar, also known as Burma.

"They are in fear of being made porters for the Burmese troops," he said, citing local sources.

He said Tuesday's fighting marked the first day of "civil war" between the KIA and the military, with rebels vowing to destroy any government infrastructure.

In the first confirmation from the Myanmar government's side, an official said Wednesday that some bridges were destroyed in the fighting in Kachin.

Myanmar has been plagued by decades of civil war between the regime and armed ethnic rebels since independence in 1948.

The KIA, thought to have at least several thousand fighters, used to be one of the most powerful rebel groups but signed a ceasefire with the junta in 1994 and was until recently considered to be open to dialogue.

The mainly Baptist and Catholic Kachin account for about seven percent of Myanmar's population.

Hundreds of government soldiers opened fire on a KIA outpost near the hydropower project last Thursday, said Aung Din, of the US Campaign for Burma.

He said about 16 state soldiers were thought to have been killed and more than 80 wounded, while four KIA troops died, including one who was allegedly tortured by government troops. The regime gave no information about casualties.

More than 1,800 villagers have fled into China's Longchun district, Aung Din said.

A Chinese official in the area gave a different figure, saying more than 100 refugees had crossed over.

According to the US Campaign for Burma, 28 Chinese engineers and technicians stuck in Kachin were allowed to return to their country on Tuesday night after negotiations between the army and Chinese authorities.

Rights groups accuse the army, which has doubled to 400,000 personnel over the past two decades, of waging a brutal counter-insurgency campaign in areas where civil war continues involving the rape, torture and murder of villagers.

Christian Solidarity Worldwide, which campaigns for religious freedoms, said it had received reports that villagers in some areas were being forced to carry weapons and ammunition for the state troops in the current Kachin fighting.

"If the conflict continues to escalate the humanitarian consequences will be dire," said East Asia team leader Benedict Rogers.

Fears of renewed conflict rose last year over government attempts to make former rebels give up their weapons or come under state control ahead of the November 2010 election.

Several local Kachin parties were refused permission to contest the vote, dashing long-held hopes for greater self rule.

Last November, thousands of people were driven across the border into Thailand after fighting erupted on election day between the military and ethnic minority rebels in eastern Karen State. Reports from the area suggest sporadic clashes continue.

In August 2009 an offensive against ethnic Chinese Kokang rebels in northeast Myanmar caused tens of thousands of people to spill over the border, earning the junta a rare rebuke from China.

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