BEIJING - WORK on building a new town called 'Eternal Prosperity' will begin next month to replace one of the cities destroyed in last year's Sichuan earthquake, state media reported on Monday.

Billions of dollars will be spent on the new seat of Beichuan county that will be built 23 kilometres from the old town and well away from geological fault lines, Xinhua news agency said, citing one of the planners.

Beichuan was one of the worst-hit towns in the May 12 quake because it lay at the juncture of two fault lines.

Roughly half of Beichuan's 26,000 residents died during the May 12 quake, which left more than 87,000 people dead or missing across a vast area of southwest China.

The new county seat will be called Yongchang, which means 'Eternal Prosperity', Xinhua reported.

The city will have 50,000 residents in three years and 85,000 by 2020, Xinhua said, citing Yang Baojun, one of project leaders from the China Academy of Urban Planning and Design.

The first phase of construction to be completed by 2012 will cost 19.3 billion yuan (S$4.2 billion) and include a school designed by experts from Harvard University and other leading global institutions.

Many students died in the quake because they were trapped in shoddily built schools that collapsed, while surrounding buildings remained standing. -- AFP