Long before health problems were officially reported 50 years ago -- and much later found as being caused by massive mercury poisoning -- residents of this small Japanese fishing town in southwestern Kyushu island had seen eery portents.

As rats ran amok, people began to notice inexplicable problems with their bodies -- shivering arms and legs, seizures, and difficulty in walking and talking. Some adults died and infant mortality rocketed.

Even after the problems were officially reported by a local hospital on May 1, 1956, no one knew what was behind the outbreak of what would come to be named Minamata disease, but it was certain that something was drastically wrong.

Chemical giant Chisso Corp, whose factories had been dumping mercury pollution into the Yatsushiro Sea since 1932, was immediately suspected but continually rejected any link with the health problems.

As years went by, babies began to be born with serious damage to their nervous systems, suffering mental and physical deformities poignantly recorded by US photojournalist W. Eugene Smith.

It wasn't until 1968 that the Tokyo central government finally declared that Minamata disease was a form of mercury poisoning caused by polluted water.

The delay and the suffering it caused remain a national scandal as Japan holds 50th anniversary commemorations here on Monday.

"I'm keenly aware of the government's responsibility for not being able to take appropriate measures for a long time and failing to prevent the damages from spreading," Prime Minister Junichiro Koizumi said last week.

"I apologize with no reservations."

In all, Chisso dumped up to 150 tons, or even more, of mercury into the tiny cove of Minamata until May 1968, according to a city document. The company was not ruled responsible for the health problems until 1973.

While thousands of people suffered from Minamata disease, not all were recognized officially as patients and half a century on nearly 4,000 people are still seeking state compensation for their sickness.

While the scars of the past still run deep, however, new concerns are overshadowing the event.

The people of Minamata are enraged by a plan to create an industrial waste dump on top of a nearby mountain, which they say will contaminate the town's water supply.

"Methyl mercury that contaminated the fish and sea was industrial waste. Why do we have to suffer from industrial waste again?" asked Minamata city assembly member Koji Nakamura.

Having made efforts to become an environmentally friendly city, the local government has required its citizens to separate garbage since 1993. Now they feel betrayed.

"We have to separate our garbage into 21 groups, so we produce less waste to dump," said a Minamata restaurant owner. "After all this effort, we don't want the dumping site in the mountain from which we get water to drink."

The proposal has been put forward by IWD Toa Kumamoto, a subsidiary of a company called IWD (Integrated Waste-management Design), which has already purchased land on the mountain.

The company declined to comment over the plan which Nakamura said was opposed by about 20,000 of the city's 30,000 residents in a petition.

Former mayor Ryuichi Eguchi reluctantly accepted the plan, saying the city did not have a say in the private company's business which falls under the jurisdiction of the prefectural government.

In the February mayoral election, the local residents refused to support Eguchi and replaced him with Katsuaki Miyamoto who pledged to handle the issue, but no progress has been made.

Atsushi Takatori, a researcher of thinktank Environmental Research Institute, said some municipalities have an ordinance that exclusively protects areas of water reserves, but Minamata is not one of them.

"If a city blindly accepts documents submitted by a private business and conducts perfunctory screening, the city wouldn't affect a prefecture's decision," he said.

"But if it handles the case sincerely from the viewpoint of protecting residents' safety, the prefectural environment panel wouldn't be able to ignore its opinion."

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