But an official with the press office of Mianyang City Quake Control and Relief Headquarters, said the report was incorrect.
"Not all 1.3 million people will be actually evacuated," Chen said.
"People will only be evacuated in case of the actual collapse of the whole bank."
Chen said 197,500 people in the valley are being moved to higher ground - about 30,000 more than previously announced - while the rest would be removed only if the dam breaks.
Currently a wall of debris is preventing the flooding of the valley.
"Officials plan to evacuate more [people] so that on Tuesday they can take the pressure off the dam by allowing water through the channel they have been furiously digging ... in order to allow a controlled release of water through this area to try and prevent massive flooding," David Hawkins, reporting for Al Jazeera from Sichuan, said.
"There is no imminent sense of emergency nonetheless there are a lot of soldiers here who are preparing for this evacuation … a possible evacuation of 1.3 million people."
The three-day drill planned for Saturday will test government communication systems to ensure that any evacuation order quickly filters down to residents in the valley.
Officials said there was no sign that the dam formed by a landslide caused by the May 12 quake was about to burst on Friday, though officials say it could do so in coming days.
Chinese soldiers were using 40 heavy earth-moving machines to dig drainage channels.
Officials quoted in state media have not said how long the work would take.
About 158,000 people living downstream from Tangjiashan lake have already been evacuated. Troops have sealed off Beichuan to the public.
Tangjiashan is the largest of more than 30 lakes that have formed behind landslides caused by the quake, which also weakened man-made dams in the mountainous parts of the disaster zone.
The government announced on Friday that the confirmed death toll from China's worst disaster in three decades was 68,858, an increase of about 350 from a day earlier.
Another 18,618 people are still considered missing.
Social workers have helped reunite more than 7,000 children separated from their parents by the earthquake in Sichuan, but about 1,000 remain without their families.
China has said it will conduct safety inspections of all schools in quake-hit areas of Sichuan, state media reported, after thousands of children were killed.
|Over a 10-day period after the |
quake, a Beichuan river swelled
by more than 60 hectares [AFP]
Countless school buildings collapsed when the 7.9-magnitude earthquake hit southwestern Sichuan province on May 12, killing thousands of pupils who were studying or taking naps.
In one school alone in Mianyang city, more than 1,300 children and teachers are dead or missing.
About 8,000 children were reported to be separated from their families in the first few days after the quake, though that figure has now been drastically reduced to 1,000, Ye Lu, a civil affairs department official, said.
"We are still getting thousands of calls per week asking about how to adopt, but we are still hoping to find the parents of these 1,000 kids," Ye said.
China's Red Cross has promised to release monthly audits of its relief operations to allay fears that aid money could be siphoned off by corrupt officials.
Jiang Yiman, China's Red Cross deputy director, said: "We will release the audit report every month.
"All money will be used for disaster relief, rescue and rebuilding efforts. No one should embezzle a penny."