Industrial waste was blamed to have contaminated tap water in an east China city, cutting supplies to two towns since Sunday, the local environment watchdog said.

The environment protection bureau of Hangzhou, capital of Zhejiang Province, said the water works in Hangzhou's Yuhang District, halted operation on Sunday after residents complained of strange odor in the tap.

Environment authorities confirmed after investigation the water source was contaminated by discharges from the upstream Lin'an city, a bureau spokesman said.

Yuhang district, with a population of about 848,400, now relies on tap water from Hangzhou Water Works Group, he said.

Water supplies, however, were disrupted in Pingyao and Liangzhu, two towns closest to the polluted water source. The local government has sent water wagons to distribute drinking water and schools and kindergartens were closed for three days starting on Tuesday.

Investigators found through lab tests organic matters including benzene and alkene in Shaoxi River from which Yuhang water works takes water, the spokesman said. "It's the first time to detect these matters in the river water and it's still unclear how harmful they are."

The source of the pollution was located at an industrial park in Lin'an, he said.

The spokesman said the upstream factories had been told to stop discharging wastes. Meanwhile, an upstream reservoir has let out more water to dilute pollution.

"We've launched round-the-clock surveillance of the water quality, and will keep the public posted of the results," he said.

He said the pollution may hopefully be cleared by Thursday.

The pollution was reported at the heel of Saturday's phenol leak that polluted Xin'an River, a major source of drinking water in Zhejiang, shutting down five water utility companies.