The vaccine can be injected, given as nasal spray or as eye drops, or put into water supplies and immunizes birds against bird flu and Newcastle disease, the China Daily newspaper reported.

It said the government would produce 1 billion doses by the end of this month for distribution early next year.

World's First

China has reported 26 outbreaks of the deadly H5N1 strain of bird flu in poultry since Oct. 19 and six human cases, with two confirmed deaths.

The government has destroyed millions of birds in an effort to contain outbreaks and vaccinated billions of chickens, ducks and other poultry.

"Chinese scientific researchers have endured four years of hard work and overcome repeated technical difficulties to successfully produce this vaccine," the Ministry of Agriculture said on its Web site.

The statement said China's treatment was the world's first live bird flu vaccine.

No Magic Bullet

Production of the live vaccine costs one-fifth as much as inactivated vaccines on the market, the statement said, citing Jia Youling, the director of the Agriculture Ministry's veterinary bureau.

The live vaccine also has a longer shelf life of 18 months, the statement said. It did not give details of production costs or say how long other vaccines can be kept.

The Asian regional director of the World Health Organization, Shigeru Omi, visited Beijing last week and cautioned that vaccinations are "not a magic bullet."

He said they have only a 70 to 80 percent effectiveness rate.