By Benjamin Kang Lim

BEIJING, Aug 11 (Reuters) - A Chinese environmental activist, once hailed a hero for protecting China's third-largest lake, has been sentenced to three years in prison for fraud and extortion, but his wife said she was convinced the charges were trumped up.

China's human rights record has come under fire from international press and rights watchdogs this month in the run-up to the one-year countdown for the 2008 Beijing Olympics.

Wu Lihong, 39, a candidate in a 2005 national campaign to name 10 people who "moved China" with their service to society, pleaded not guilty and will appeal against the verdict meted out by the Yixing People's Court on Friday, his wife Xu Jiehua said.

"The court did not summon any witnesses and ignored the defence's argument," his wife told Reuters on Saturday.

Wu was accused of extorting 15,000 yuan ($1,900) from businesswoman Dai Yanhua, but he argued the money was a commission for selling anti-pollution facilities to factories, his wife said.

Wu was arrested in April after reporting worsening pollution at Taihu lake, which has an area of 2,420 square km (934 square miles) and a shoreline of 400 km (250 miles). It straddles the border of Jiangsu and Zhejiang provinces and is home to more than 60 kinds of fish.

In late May and early June, the lake was covered in a thick foul-smelling canopy of green algae that left tap water undrinkable for more than 2.3 million residents of Wuxi city in Jiangsu province and prompted a run on bottled water for days.

Tap water in Wuxi has been back to normal after the government took out 6,000 tonnes of algae, closed some chemical factories and diverted water from the Yangtze river, but experts said it did not solve key problems.

The court put off Wu's trial in June to investigate accusations interrogators tortured him to extract a confession.

"Wu Lihong told the court he was physically tormented for five days and five nights... He showed scars from cigarette burns on his hands," his wife said.

But the court ruled there was no evidence of torture.

Wu's wife has sued the cabinet's State Environmental Protection Administration for naming Yixing a model city, but the court refused to take up the case.

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