European and Canadian engineering companies are about to go on trial in Lesotho accused of paying an official about £3m for contracts for one of Africa's biggest engineering projects, the £1bn dam that supplies water and electricity to South Africa. The British companies -Balfour Beatty, Sir Alexander and Gibb and co, Stirling International Civil Engineering and Kier International - are charged individually or as members of consortiums created for the project.

When the allegations first came to light the World Bank, which lent about £100m for the project suggested that no action should be taken for fear of undermining the scheme. It now supports the prosecution which began last week with the trial of Masuha Sole. He has pleaded not guilty to 16 counts of bribery and fraud. Mr Sole was appointed chief executive of the Lesotho highlands development authority in 1986 when the dam project began. He was responsible for awarding contracts worth hundreds of millions of pounds to foreign construction companies.

According to the indictment, the evidence will show that payments were made by the contractors through intermediaries - two South Africans and a Frenchman - to Mr Sole secretly. That these payments into at least three Swiss bank accounts coincided with events leading up to the award of the major contracts.

The Lesotho attorney general, Fine Maema, said, ' people are quick to point the finger at Africa but if someone is taking the money then someone is paying it and they must be held accountable too. You can see from this case that it is not only Africa that is corrupt'.

The dams have been controversial from their conception 16 years ago by the South African apartheid regime. International funding was initially routed through hidden accounts to disguise the fact that it was going to a racist regime. Thousands of people who lost grazing land and their homes to their project have complained of inadequate compensation. Few of those who live under the huge pylons carrying power to South Africa have electricity themselves.

'This is a test case of the will of northern countries to take their own companies to court', said Stiaan van der Merwe, South African representative of the anti corruption organisation, Transparency International. 'Let the Northern countries also address the problem and not be so pontificating', he added.

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