Chinese police have arrested 96 people for using melamine-tainted milk powder to produce dairy products, state media said on Thursday, the same chemical that killed several babies in a milk powder scandal in 2008.

Last July, samples of milk powder found in northwest China's Gansu and Qinghai provinces had levels of melamine up to 500 times the permitted limit, underscoring the lax enforcement of food safety in the country.

Among the people arrested, 17 had been convicted, including two people sentenced to life in prison, Xinhua said, citing a statement from the State Council's Food Safety Commission.

Thirty-eight people were awaiting trial, the report said, adding that Chinese authorities have seized 2,132 tons of melamine-tainted milk powder. "They were found to have used melamine-tainted milk powder as raw material to produce dairy products or sell such dairy products," Xinhua cited the commission as saying. The latest crackdown identified "loopholes in the quality control system of dairy products", Xinhua said, citing the statement.

The exposure of tainted milk products in poor and remote parts of China's northwest has underscored the persistence of food safety problems that have alarmed consumers and sparked criminal scandals that led to executions and official sackings.

A total of 191 officials were punished, with 26 fired, Xinhua said.

In 2008, at least six children died and nearly 300,000 children fell ill from drinking powdered milk laced with melamine, an industrial compound added to fool inspectors by giving misleadingly high results in protein tests.

China executed two people in November 2009 for their role in the scandal, but has also kept a tight lid on public discontent over the case, jailing a man who organized a website for parents of children who became ill.

Melamine can cause kidney stones, and is used to make plastics, fertilizers and concrete. Its high nitrogen content allows protein levels to appear higher when added to milk or animal feed, allowing traders to disguise substandard products.