Colorful gondolas lazily ferry tourists around the floating gardens of Mexico City's Xochimilco district, but not all is green in this idyllic vestige of the Aztec empire increasingly choked by urbanization.

Criss-crossed with natural canals and artificial islands, Xochimilco is the last reminder of how the Aztecs lived 500 years ago at the time the Spanish conquistadors arrived, when Mexico City was mostly covered in water.

The Spaniards set about draining the giant system of lakes, eventually leaving only the canals of Xochimilco (pronounced sho-chee-MEEL-co).

Today, they too are threatened as this metropolis of nine million people struggles to deal with the pressure exerted by its booming population.

The neighborhood, a UNESCO World Heritage Site that draws a million tourists a year, is dotted by around 600 shantytowns.

There were 17,500 illegal residences in 2009, according to local officials.

New shacks pop up every month, eventually morphing into more permanent buildings.

In the tourist quarter, the trumpets and guitars of mariachi music serenade visitors as they stroll along the canals, with their lush vegetation and man-made islands called "chinampas."

But on the other side of the neighborhood, at the foot of the mountains that ring Mexico City, former farmland that was temporarily left fallow was invaded by squatters in 2010.

Six years later, their improvised wood and cardboard shacks have given way to concrete houses. A four-story building has even sprouted.

It is one of many such settlements in the area.

- Polluted drinking water -

There is more at stake than just pretty scenery.

Xochimilco's springs and aquifers are a crucial source of water for the sprawling capital.

With no sewage systems, the shantytowns are polluting the soil and water.

By laying concrete on formerly empty land, they have also disrupted old drainage paths, causing floods.

Illegal land sales are fueling the problem.

"A lot of times land is being sold by people who in fact just took it," said Victor Cruz of housing charity Techo Mexico, which is working to promote more sustainable urban development.

Activists say most of the squatters bought their land in good faith, from illegal dealers taking advantage of people who can't afford to buy anywhere else.

Julia Gonzalez is one of them.

She has lived since the 1990s in a small white house on the edge of the city, where the only sounds are a barking dog and the blows of a hammer.

There is no road, just the far end of one of Xochimilco's canals.

Several years after buying her land, with a notarized deed, she learned the seller did not in fact own it.

"When the police came to see us, I realized we'd been cruelly tricked," said Gonzalez, 48.

"But the people who sold to us are still doing it, and the authorities don't stop them."

- Dangerous cause -

Frustrated with city officials' inaction, longtime locals have launched a grassroots campaign to save their neighborhood.

But in a country known for the gruesome violence of organized crime, that sometimes means risking their lives.

Claudia Zenteno lives near a protected natural area at the heart of Xochimilco.

She has become one of the most prominent campaigners to stop its rampant urbanization and environmental degradation.

In 2002, she pressed charges against a family accused of selling misappropriated land.

Four people were eventually convicted in the case. The ringleader got five years in prison and a $90,000 fine.

But Zenteno's son was kidnapped for five days in what she believes was a reprisal. Her car was also stolen.

"It was a very difficult struggle," said Zenteno, 52, who now lives under police protection. "Look what it got me."

Facing pressure, local authorities have announced a "zero growth" policy -- to little effect.

The head of the local natural resources department, Silvia Soriano, said politicians turn a blind eye to the illegal land grab in exchange for votes.

Officials have now announced plans to legalize part of the occupied land, while reclaiming other areas where the shacks are still rudimentary.