BEIJING (AP) _ A top Chinese union official is blaming foreign businesses for alleged labour abuse _ including child labour _ in the production of official Olympic-licensed products in southern China.

``We welcome foreign companies that respect Chinese laws and look after their workers,'' Xie Liangmin, a senior official with the All-China Federation of Trade Unions, said Tuesday in the state-run China Daily newspaper. ``Those relying on cheap labour and making profits by violating workers' rights will finally be ousted.''

The ACFTU is the Communist Party-controlled umbrella group for government approved unions.

Xie's threat is the latest fallout from a report released by PlayFair 2008, which alleges children as young as 12 work at China-based factories producing Olympic-licensed products like bags, caps and stationery products.

The report also alleges forced overtime and the violation of minimum-wage rules.

Entitled ``No Medal for the Olympics on Labor Rights,'' the report was critical of the local Beijing 2008 Olympics organizing committee _ and the Lausanne-based International Olympic Committee _ for failing to monitor the production.

The 2008 Olympics are dwarfing records for spending, and top IOC officials expect it to be the most profitable. Beijing is spending about US$40 billion to modernize the city, and worldwide sponsors are clamouring to be involved, hoping to tap demand from China's growing middle class.

The PlayFair report said three of the companies were set up with capital from Hong Kong, and the other was Taiwan-invested. One of the companies _ Yue Wing Cheong Light Products (Shenzhen) Co. Ltd. _ was listed with its headquarters in the United States.

All four companies reached by The Associated Press denied the allegations.

Peter Ho, chief executive officer of Mainland Headwear Holdings Ltd., issued a statement Tuesday.

``The allegations in the report from PlayFair about our factory are totally groundless,'' the statement said. Ho said the lowest paid workers in the factory in Shenzhen earned an average of US$145 monthly, above the legal minimum wage of US$90 in southern China.

Embarrassed local organizing officials released a statement Monday saying they had ``a strict policy for manufacturers of Olympics-licensed merchandise under a socially responsible management system.''

The Beijing Organizing Committee for the Olympic Games acknowledged the four companies have Olympic contracts, which it said would be cancelled if the companies violated national labour laws.

``BOCOG will deal with the issue seriously so as to maintain the image and reputation of the Beijing Olympic Games,'' the statement said.

The threat to cancel the contracts was criticized by PlayFair, which said workers would be further harmed.

``The workers in these factories have been subjected to serious exploitation,'' Brussels-based PlayFair said. ``The Beijing Games Committee should insist that the companies respect the fundamental rights of these workers and should not cut and run from a problem for which the Olympics movement and, in particular, the IOC itself must take full responsibility.''

The Switzerland-based IOC said it does not have direct control over all official products that carry the five-ring Olympic label. It said it has policies on fair labor standards that it expects Olympic host cities and licensed manufacturers to follow.

The IOC rejected calls from FairPlay for additional monitoring, saying it already works with associations of sporting goods makers and retailers on codes of conduct.

In Washington on Monday, U.S. House Speaker Nancy Pelosi called for a ``thorough investigation'' by the IOC and the Beijing organizers.

``The Olympic Charter calls for `respect for universal fundamental ethical principles,''' Pelosi said. ``It is my hope that the organizers of the 2008 Olympics and the corporations cited in the reports will end any practices that are inconsistent with international labor right standards and the Olympic ideals.''