Chinese police have arrested four suspects who allegedly added melamine, a toxic chemical, to milk formula and seized 76 tons of tainted raw powder and finished dairy products in the country's latest crackdown on food safety crimes.

The latest melamine-tainted milk powder was first discovered in northwest China's Gansu Province, but police traced the source to Dongyuan Dairy Factory in Minhe County of neighboring Qinghai Province, a spokesman with the National Food Safety Regulating Work Office said Friday.

Police have arrested three senior figures of the factory, including the owner Liu Zhanfeng, and an alleged raw milk powder supplier Zhou Zhonglin linked to the case, the spokesman said.

"All tainted milk powder at Dongyuan Dairy Factory have been sealed, and the Dongyuan dairy products that were sold to distributors outside Qinghai have also been seized," the spokesman said. "We have not yet found tainted milk products on the consumer market."

Tests of samples of the milk powder showed up to 500 times the maximum allowed level of the chemical melamine, said Gansu provincial food safety watchdog in earlier interviews.

The spokesman said a few packages of milk formula also tested positive for containing excessive melamine in north China's Jilin Province. The tainted products were among 900 kilograms of milk formula that were found to be produced by a plant with suspected falsified production licenses.

Police sealed off all milk formula at the plant's storage facility and are continuing the investigation.

In Dongyuan's case, police found 38 tonnes of the tainted raw materials were purchased from north China's Hebei Province, the source of the toxic baby formula scandal that brought down the state-owned dairy giant Sanlu Group in 2008.

Wang Zhongxi, deputy chief of the quality control bureau in Gansu, told reporters Friday that it is possible that traders had bought tainted milk formula discovered in the Sanlu scandal with the intention of processing and reselling it.

The tainted dairy products were meant to be destroyed but it is not immediately clear how it leaked out again.

In the Sanlu scandal, unscrupulous Chinese milk producers were found to have been mixing melamine to dairy products in a bid to falsify protein content tests. The practice, said to have been existing for quite a time, caused the deaths of at least six Chinese babies and left another 300,000 infants ill, sending chills to consumers at home and abroad.

The resurfacing of tainted dairy products, again, shocked Chinese parents.

"We feel really worried about it," Chen Hui, mother of a two-year-old in Gansu, told Xinhua. "The scandal popped up again. More babies might be harmed."

An earlier police investigation revealed that Dongyuan managers sent three samples of milk powder to be tested for melamine content in Gansu, instead of Qinghai, on June 25.

Gansu's food safety watchdog called the police after test results showed the samples had excessive levels of melamine.

Local food safety authorities said Dongyuan sold milk formula mainly to retailers in east China's Zhejiang and Jiangsu provinces. Only a small amount was sold in Qinghai.

Zhejiang's food safety commission on Friday said they had seized three tons of Dongyuan milk powder in food processing factories in the province.

The tainted milk powder, in 25-kg packages, was mainly used to produce dairy products such as ice-cream but not to be sold directly on the market as baby formula, said the commission.

"Most" of the contaminated milk powder was still being processed and had not yet entered the market, it said.

The spokesman with the National Food Safety Regulating Work Office said authorities pledged to strike hard on food safety crimes and to thoroughly investigate such cases if discovered.

In the Sanlu scandal, a dairy farmer and a milk salesman were executed after being convicted by the court. The company's general manager, Tian Wenhua, was given a life sentence in January 2009 on charges of producing and selling falsified or substandard products. Altogether 21 people were convicted in connection with the scandal.