New lending surged to 1.39 trillion yuan (203.5 billion dollars) last month, and property prices rocketed at the fastest rate since April 2008, figures from the National Bureau of Statistics said.

Massive lending in 2009 in China has triggered fears that the excess liquidity is fuelling inflation and feeding a spending spree by speculators, leading to property and stock market bubbles.

Following the release of the data, the central bank called for vigilance against "possible hidden systemic financial risks" and controls on credit in a report that otherwise announced no new major policies.

"Credit funds will support projects under way, and loans for new projects are to be strictly controlled," it said without elaborating.

The report called for continued pro-growth fiscal policies that have been in place for the past year.

Meanwhile, inflation in January was lower than expected, with the consumer price index rising just 1.5 percent year-on-year.

The increase was mainly driven by food prices, which rose 3.7 percent during the first month of the year. But inflation slowed from December, when prices rose 1.9 percent.

This prompted analysts to say aggressive tightening measures were unlikely in the short term, agreeing with central bank governor Zhou Xiaochuan's assessment that inflationary pressures would remain mild in the short term.

"Any systematic tightening across the board will... be based on careful analysis of the reasons for the price rises," such as an overheating of overall demand, said Zhang Zhizhou, an economist with CEB Monitor Group.

Economists at the Bank of Communications said excess liquidity should be curbed in in a "timely manner" but said the end of China's loose monetary policy would be "gradual".

"It is not suitable to impose prompt, stiff tightening," they said in a note.

China took steps last month to calm growing inflationary pressures, as well as soaring stock and property prices caused by runaway bank lending, which nearly doubled in 2009 from a year before to 9.6 trillion yuan.

The People's Bank of China twice raised the interest rate on both its benchmark three-month and one-year treasury bills in a bid to deter new lending.

Last month, Credit Suisse said six banks had confirmed new lending had been suspended from January 19 until the beginning of February after an emergency meeting by the central bank's monetary policy bureau.

It did not name the banks.

Chinese banks have also been ordered to increase their capital reserves -- effectively limiting the amount of money they can lend -- amid mounting fears over bad debts as consumers go on a spending spree on property and cars.

Property prices in 70 medium and large cities meanwhile rose 9.5 percent in January from the same month a year ago, the fastest pace since April 2008.

It was the eighth straight month that property prices in Chinese cities surged year-on-year, after declining for six months since December 2008 due to government tightening measures and the global financial crisis.

The prices increased by 1.3 percent last month from December, according to a statement on the National Bureau of Statistics website.

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