China's quality watchdog has disclosed that a dairy company in east China's Zhejiang Province added protein powder extracted from the dirty hydrolyzed leather waste in order to enrich the protein content in their dairy products.

Leather protein powder is believed to be harder to detect than the notorious industrial chemical melamine which was added to milk powder and other dairy products in China, sickening more than 294,000 infants and killing at least six.

The latest incident, in the wake of China's melamine-tainted baby formula scandal, was first reported to China's top quality watchdog in an anonymous letter in February this year, the Chengdu Business Daily reported.

The 'Morning Garden' dairy firm based in Lanxi of Jinhua City employs around 100 people and occupies 2.8 acres of land. It has a daily production capacity of 70 tons and annual sales revenue of 18.2 million yuan, or about 2.67 million US dollars.

Local quality inspection authorities tested samples from eight batches of its dairy products on March 18 and found the hydrolyzed leather protein in five batches, including semi-finished products.

The toxic material was detected again during another inspection on six batches of dairy products by the firm to be sold to three other cities on April 2. Police detained Mao Jianhua, its legal representative, and two others involved on the afternoon.

The report said the leather protein powder is produced from hydrolyzed leather scraps in tanneries, which contain the chemicals potassium dichromate and sodium dichromate. The two compounds cannot be absorbed by the human digestive system and will accumulate in the body. Children with large amount of the toxicants will suffer from swollen joints and could even die from the poisoning, the report said.