Syrian rebels have taken control of the country's biggest hydro-electric dam on the Euphrates River, activists said, dealing a strategic blow to President Bashar al-Assad.

The Syrian Observatory for Human Rights and other Syrian activists said Islamist fighters seized the entrances to the dam, although gunmen had not entered the main operations room and the dam had continued to function.

They had earlier swept through the nearby town of Tabqa, renamed al-Thawra (Revolution) by the country's rulers. A statue of Assad's father, the late President Hafez al-Assad, was set on fire in the town, video footage showed.

Other video posted on the Internet showed what activists said was an abandoned Air Force Security base next to the dam and army installations inside the town.

"The dam was protected by an artillery battery and many intelligence units. The rebels moved on them in a lightning offensive yesterday, overrunning their positions and capturing scores of personnel," said Abu Ziad Teif, an opposition activist in contact with rebels in the area.

He said it was not clear whether the rebels would be able to keep the dam in operation and whether enough employees were left at the site. Extra power cuts were reported in the war ravaged city of Aleppo, which is partly supplied by the dam.

Rami Abdulrahman of British-based Syrian Observatory described the swift collapse of Assad's forces in Tabqa and around the dam as one of the president's biggest strategic setbacks in the 22-month-old Syrian uprising.