Environmentalists have warned that an oil spill would pour 4,000 tons of oil into the lake - known as the Blue Eye of Siberia - in just 20 minutes, causing irreparable damage. But the Kremlin is impatient for construction to begin and has given green groups' concerns short shrift. Driven by the lucrative prospect of supplying Russian oil to China, Moscow appears to have put profit before the sanctity of a Unesco World Heritage Site.
President Vladimir Putin has ordered Transneft, the state-controlled pipeline company, to press ahead with construction, and the project has been taken under the personal control of the Russian Prime Minister, Mikhail Fradkov.
This week Transneft approved a work schedule for the pipeline that envisages permits being granted by the end of this year so that work can start in 2006. The first stage of the pipeline is due to go online in 2008.
Russia's Natural Resources minister had objected to the plan because in places the pipeline would run within 800m of Lake Baikal. But under pressure from the Kremlin the ministry appears to have dropped all objections. Rinat Gizatulin, the ministry's spokesman, explained to the daily Kommersant: "We held consultations with Transneft and the ministry was satisfied with the measures which the company has promised to take for the protection of Baikal." He promised the ministry would keep a close watch on construction work to ensure that environmental legislation was not flouted.
Sergei Grigoriev, Transneft's vice-president, said the company had done all it could to meet ecologists' concerns. "We have proved that we have placed the pipeline as far away from Baikal as we could. To place it further away would not have made economic sense."
The £8.8bn pipeline will stretch from Taishet in eastern Siberia to the Sea of Japan, a distance of almost 2,600 miles. The project is modern Russia's most ambitious and is being built to supply oil to China, Japan and South Korea. When completed it will transport 80 million tons of oil a year and provide the Russian treasury with the equivalent of hundreds of millions of pounds in transfer fees.
It was decided to lay a stretch of the pipeline close to Lake Baikal in order to follow the Baikal-Amur railway line, which skirts the lake, making it cheaper to carry out construction and maintenance. But green groups have warned that this puts the lake's protected status at risk.
Roman Vazhenkov, coordinator of Greenpeace Russia's Baikal programme, believes the pipeline is a catastrophe waiting to happen. "One major accident will mean there will be no site left worth protecting," he said.
Baikal is the largest single source of unfrozen fresh water - holding 20 per cent of the planet's fresh water - and a rich store of biodiversity, with 1,340 animal species and 570 plant species, many of them endemic.