Pollution in China's southern region of Guangxi sparked panic buying of bottled water this week after a mining firm dumped toxic cadmium into a river, according to state media.

Residents in Liuzhou city filled shopping carts with boxes of bottled water, as the government sought to reassure people that the drinking water supply was safe, Shanghai's Oriental Morning Post reported.

Authorities found waste discharged into the Longjiang river by the Jinhe Mining Co caused excessive levels of cadmium some three times the government's accepted limit, the official Xinhua news agency said.

The pollution was originally detected on January 15 after it killed a "small number" of fish, but measurements on Wednesday showed elevated levels of cadmium further downstream, it said.

The Liuzhou government could not be reached for comment Thursday, a public holiday for the Chinese Lunar New Year.

Authorities had dispatched officials to ensure ample supply of bottled water at shops and prevent price gouging, Xinhua said. State media showed pictures of shelves at one supermarket almost stripped bare of bottled water.

However, Liuzhou officials said water quality in the area was "safe". Over the past week, firefighters had dumped chemicals aimed at neutralising the cadmium into the river.

According to the World Health Organization cadmium is a carcinogen which can seriously damage the kidneys, bones and respiratory system. It has several industrial applications, ranging from steel to batteries.

Three decades of rapid economic growth and lax enforcement of environmental protection laws have caused most waterways in China to be heavily contaminated with toxic waste from factories and farms.

A toxic algae bloom -- likely caused by pollution such as chemical fertiliser -- on Taihu Lake in eastern China contaminated water supplies for more than 2.3 million people in 2007.

Pollution by individual factories has also sparked protests in China as residents, who fear for their health, show a rising awareness about the environment.

In a recent case, hundreds of people living near a plant making solar panels in eastern China protested in September last year, forcing authorities to temporarily shut the Jinko Solar factory.