BOSTON, July 6 (Reuters) - Health authorities in Canada and Massachusetts are warning consumers of the risk from China-made counterfeit toothpaste after more tainted products were found, deepening concern about the safety of Chinese goods.

Preliminary tests conducted in Canada on counterfeit Colgate toothpaste indicate the fake products may contain even more harmful bacteria than authorities first suspected, Health Canada officials said on Friday.

Canadian authorities urged consumers on June 29 to avoid Chinese toothpaste in the Canadian market because 21 products were found laced with harmful levels of diethylene glycol, an industrial solvent used in some antifreeze products.

New York-based Colgate-Palmolive Co. <CL.N> has said the products are fakes and that it does not use, nor has ever used, diethylene glycol as an ingredient in its toothpaste anywhere in the world. The chemical, also known as DEG and sometimes illegally used as an inexpensive sweetener and thickening agent.

"Consumers who have this counterfeit product are advised to discontinue use immediately and not to use their toothbrush," a Health Canada statement said of the toothpaste.

Phony products, labeled "Manufactured in South Africa", include misspellings on their packaging such as "isclinically" "SOUTH AFRLCA" and "South African Dental Assoxiation."

In Canada, they were found in discount chain "Everything for a Dollar Store." Health Canada said distributors are cooperating and have removed the product from their shelves.

In Massachusetts, the Department of Public Health said toothpaste suspected to contain a toxic chemical was found in stores in nearly a dozen communities despite a June import alert issued by the U.S. Food and Drug Administration.

Local authorities urged consumers to avoid toothpaste labeled "Made in China," toothpaste labeled "Colgate" that is manufactured in South Africa and toothpaste without English language labeling.

"Despite FDA's efforts, suspect products continue to be found, including in Massachusetts -- mostly in small, independent dollar-type discount stores," the statement said.

Colgate-Palmolive has said it was working closely with the FDA to identify those responsible.

The warnings come amid growing concern in the United States and Latin America over the safety of Chinese products after a series of recalls and bans on items ranging from children's toys to toothpaste.

In Panama, 83 people have died after taking medicines contaminated with a Chinese-made toxin last year and the death toll is expected to rise, a senior prosecutor investigating how the medicines became adulterated said on Thursday.

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