A whitening agent that could cause cancer has been found in tissues produced in underground factories in southwest China's Guangxi Zhuang Autonomous Region.

Moldy newspaper, old books, medicine packaging and shredded paper were being used to make the tissues in unlicensed factories in Nanning, the region's capital, while the owners claimed the tissues were made from pure wood pulp, China Central Television reported yesterday.

Fluorescent brightener was being used to whiten the recycled waste paper and make them appear cleaner, the CCTV investigation found.

If absorbed by the human body, the agent is difficult to resolve and long-time exposure can lead to cancer, CCTV reported.

A large amount of lime powder containing heavy metals such as lead and cadmium was also mixed in during the manufacturing process in order to cut costs, a worker at the Jinyang Paper Co told CCTV.

The tissues were being sold at 0.2 yuan per pack, half the price of branded ones at wholesale markets and were supplied to many local eateries, CCTV said.

Similar tissues were found in some small restaurants in Shanghai in March. Shanghai quality inspection officials strengthened inspections and launched a crackdown on producers.

Shanghai Bureau of Quality and Technical Supervision said its last crackdown was in May, when a hideout in the city's Zhabei District was discovered producing substandard tissues. The hideout didn't have a production certificate, and more than 230 boxes of tissues and raw materials were confiscated and destroyed, officials said.