The powder was seized in northwestern China's Gansu province after tests showed it contained up to 500 times the allowed level of the toxic industrial chemical melamine, Xinhua news agency reported.
The Beijing News said tainted powder has also been detected in Jilin province in China's northeast and that two officials from the dairy company at the centre of the latest discovery in Gansu had been detained.
The reports highlight China's continued problems reining in the use of melamine, which is used to make plastics but has been widely and illegally added to dairy products to give the appearance of higher protein content.
In 2008, melamine was found in the products of 22 Chinese dairy companies in a massive scandal blamed for the deaths of at least six infants and for sickening 300,000 others in China.
It also led to huge worldwide recalls of Chinese dairy products.
China's government has repeatedly said that all tainted products were seized and destroyed after the scandal and there was no further public health threat, but reports of tainted items have continued to trickle out.
Xinhua said authorities traced the latest contaminated batch of milk powder to the Dongyuan Dairy Factory in Qinghai province, which borders Gansu.
It said the seized powder included 64 tonnes of raw milk powder and another 12 tonnes of finished powder. It gave no other details, such as whether any contaminated products had made it onto the market.
The Beijing News said Dongyuan's "legal representative" Liu Zhanfeng and its production manager Wang Haifeng had both been detained.
It also said authorities in Jilin had launched an investigation after test samples indicated melamine contamination there, but gave no details. It was not immediately clear whether the Qinghai and Jilin cases were related.
Melamine ingestion can cause kidney stones and urinary tract infections.
A total of 21 people were convicted for their roles in the 2008 scandal, and two were executed.
Source: AFP
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