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World Bank money is directly aiding Chinese forced-labor camps in China's desolate prison system, human rights activist Harry Wu says.

A project to improve food production on the edge of the Taklimakan Desert in Xinjiang Province is pouring money into an area dominated by prison camps and People's Liberation Army gulags, Wu said Monday.Wu's latest report on China's "laogai," or reform-through-labor prison system, comes just months after his arrest in China caused a major tremor in Sino-U.S. relations. In August he was expelled after a Chinese court convicted him of spying and sentenced him to 15 years in prison.

He said the World Bank's International Development Association has extended at least $90 million in credit to the Tarim Basin Project in the remote area populated by laogai camps run by the Ministry of Justice, and at least 14 smaller forced-labor camps operated by the PLA.

The bank's 1991 staff appraisal report on the project does not mention the forced-labor camps, but one of the project maps shows Pailou Farm, a laogai camp, Wu said.

World Bank spokesman Graham Barrett said Wu had not discussed the allegations with the bank and he wouldn't comment until he examined Wu's report. He added, "The bank does not lend money in any way to fund this sort of thing. If there is any evidence, then we will take the appropriate action."

Wu urged the World Bank to appoint an independent commission to investigate the project and find out why China failed to provide full information to the bank about the project area. The bank should also adopt a policy barring the use of forced labor on all World Bank projects, he said.

Wu visited the Xinjiang area, which borders Kyrgyzstan and Kazakhstan, in 1994 and surreptitiously photographed prisoners working in cotton fields there. He was arrested this year when he again tried to re-enter Xinjiang from Kazakhstan.

Xinjiang and neighboring Qinghai province have long been known as the center of China's gulag, the destination of millions of Chinese who over the decades have been charged with criminal and political wrongdoing.