Farmers had for a long time used the water from nearby rivers, which are contaminated by the factory pollution, to irrigate their vegetables, corn and melons, the report said.

The factory, which closed on Sunday after filing for bankruptcy, had a section that produced mercury and droplets of the chemical can still be seen around the grounds of the complex, according to the report.

The plant had once directly discharged into one of the rivers, poisoning all the fish in fish farms nearby, it said.

Mercury is listed by the World Health Organization as a possible carcinogen that has many other severe health side effects for humans if exposed to high levels.

Experts from the local environmental protection department and a local agriculture college have confirmed soil and vegetables contain mercury levels exceeding safe limits, but it was not clear by how much, the report said.

Severe environmental degradation has accompanied China's rapid economic growth and industrialization since the early 1980s, with serious pollution from factories now a major problem across the country.

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