Myanmar is probing whether to resume construction on a controversial Chinese-backed dam, state media reported Saturday, with promises to listen to fierce public opposition to the project.

The fate of the $3.6 billion Myitsone dam in northern Kachin state has hung in the balance since it was abruptly halted by Myanmar in 2011 following protests over environmental and safety concerns.

The hydropower project came to symbolise China's economic dominance in formerly junta-run Myanmar and now poses a delicate challenge to the country's new civilian leader Aung San Suu Kyi.

The veteran activist is eager to prevent renewed protests at home but also wants to maintain healthy ties with top investor Beijing, which has been lobbying her government to unfreeze the project.

China also holds strong sway over ethnic rebel militias along the two countries' restive border and has a key role to play in peace talks that Suu Kyi is determined to make progress on.

A commission advising Suu Kyi's administration on whether to scrap the dam submitted its first report to her government on Friday, according to the state-run Global New Light of Myanmar.

It said an environmental and social impact assessment was underway and that the commission had already met local officials and other stakeholders.

A final decision on the project's fate would take into consideration environmental costs, the "desires and opinions of local people and societies and potential effects on foreign investment", the report added.

Local opposition to the dam has been fuelled by a mix of concerns, including its location near an active seismic fault line, the impact of flooding on local residents and a general lack of transparency in a project viewed as a resource grab by Beijing.

The dam was originally designed to funnel the vast majority of its electricity back to the mainland.

China was instrumental in shielding Myanmar's former junta from international sanctions and was rewarded with lucrative concessions that often had little trickle down benefit.

Beijing is still by far Myanmar's largest foreign investor, despite democratic reforms in recent years that have seen Western firms pour in.