Cheap clothes made in China have been found to contain high levels of a potentially dangerous chemical. Formaldehyde is used to protect clothes that have to be shipped great distances against mildew.

However, long-term exposure to high levels can be harmful, causing problems ranging from minor skin rashes to some types of cancer. Tests discovered formaldehyde concentrations up to 900 times above the safety limit in children's and adults' woollen and cotton clothes from China.

"Any consumer worried about harm caused by clothes they have bought should contact the retailer or report their concerns to trading standards," a spokesman for the Government's new department for business, enterprise and regulatory reform said.

Formaldehyde resins have been used on fabrics for decades to make wrinkle-free and stain-resistant-garments. The chemical can be used, for example, to keep the crease in trousers.

The types of materials most likely to have been treated are blended cotton, wrinkle-resistant cotton, shrink-proof wool, rayon and synthetic blends.

Bryan Lewin, chairman of the Trading Standards Institute, said: "We would expect trading standards departments here to carry out tests to establish formaldehyde levels.

"At the same time, there is a general-requirement on importers, manufacturers and retailers to ensure that the consumer products they are selling are safe."

A spokesman for the Ministry of Consumer Affairs in New Zealand said it is investigating the nature and size of the problem there.

Other recent problems have involved toxic pet food, toothpaste laced with an ingredient used in anti-freeze and car tyres that were allegedly missing a key safety feature.

The ongoing rows over the quality of Chinese goods threatens a diplomatic row between East and West.

The Chinese authorities insist the recalls and complaints are motivated by trade protectionism rather than safety.