Russia's most controversial factory, the Baikal Pulp and Paper Mill, which has worried environmentalists for 25 years, could restart operations within a month, a business daily said on Tuesday.

Last week, Russian Prime Minister Vladimir Putin signed a resolution excluding the production of pulp, paper and cardboard from the list of operations banned in the Baikal natural territory.

Environmentalists decried the move and are planning to appeal to President Dmitry Medvedev to cancel Putin's resolution, Kommersant reported.

A public campaign to close or convert the pulp and paper mill, built on the shores of the world's largest freshwater lake in 1966, became one of the symbols of Glasnost, the "openness" policy proclaimed by the Soviet leader Mikhail Gorbachev in late 1980s.

It involved the nation's leading statesmen and literary men and forced the Soviet government to promise a halt to pulp production by 1993.

The collapse of the Soviet Union in 1991 delayed the decision, and it was only in October 2008 that the plant switched over to a closed water cycle, preventing the discharge of waste into the lake, which is a UNESCO World Heritage Site.

Closed-cycle production proved unprofitable and the plant, which is owned by industrial magnate Oleg Deripaska and can produce 200,000 metric tons of pulp and 12,000 tons of packaging paper a year, launched bankruptcy proceedings in October 2009.

Putin visited the plant in late July 2009 and made a four-hour dive to the bottom of Lake Baikal last August, declaring the lake "in good condition, and almost unpolluted." He said then that production at the plant could be restarted.

If resumed, the plant would be Deripaska's second business "saved" by the prime minister. Last summer, Putin also intervened to resume cement production in the northwestern town of Pikalyovo.

In late December, the Baikal mill started testing its equipment, and produced the first test batch of unbleached pulp last week.

A company source told RIA Novosti last week that the Baikal pulp plant would continue arrangements to resume production, but said there was still no question of commercial-scale pulp production.

MOSCOW, January 19 (RIA Novosti)