(Adds Sassafras halts shipments paragraphs 11-12)

WASHINGTON, Oct 10 (Reuters) - Marvel Entertainment Group Inc <MVL.N> halted shipments of its Chinese-made Curious George products and may recall the toys if emergency testing shows unsafe levels of lead in them, the company said on Wednesday.

Marvel said it was taking the action after the advocacy group Center for Environmental Health said it found a Curious George doll containing 10 times the legally-allowed lead level.

"We have already reached out to the Center for Environmental Health for their help in identifying the product they tested and the full details of their testing," Marvel said.

"In the meantime, we have halted all shipments of our Curious George product line and are pulling various samples from the factory for rush lead testing."

Mattel Inc <MAT.N>, best known for its Barbie Dolls and Fisher Price toys, has recalled about 21 million Chinese-made toys over the past few months mostly because of excessive levels of lead paint.

Lead is toxic and poses serious health risks, including brain damage, to children when ingested.

Marvel said it would launch a recall if emergency tests show excessive amounts of lead in the products in question. The company said that all its product lines were being tested by an independent laboratory.

Last year, Marvel began merchandising a line of Curious George dolls, action figures and accessories linked to an animated feature film and television series. All the Curious George products are made in China, Marvel spokesman David Collins said.

The Curious George products account for a "very small" part of the company's annual sales, Collins said. Marvel is best known for licensing its Spider-Man, Incredible Hulk and other comic book superheroes for films, DVDs and video games.

The nonprofit Center for Environmental Health said it also found high levels of lead in vinyl lunch boxes and backpacks made by privately-owned Sassafras Enterprises. The group filed a legal notice accusing Sassafras of violating a 1986 California law that prohibits exposing consumers to carcinogens without warning.

Sassafras said it halted shipments of lunch boxes and backpacks cited by the advocacy group.

"Our own tests done by an independent laboratory contradict what the Center for Environmental Health's tests show. We need to figure out exactly what this means and until then we've stopped all shipments of the products to protect consumers," a Sassafras spokeswoman said.

The advocacy group said it also notified 10 retail store chains including Toys "R" Us, Wal-Mart Stores Inc <WMT.N>, Kmart, Sears <SHLD.O>, KB Toys, Target <TGT.N>, RC2 Corp <RCRC.O>, Michael's Stores Inc, Costco Wholesale Corp <COST.O> and Kids II Inc that they were selling toys with excessive lead in violation of the California law.

Michael Green, executive director of the Center for Environmental Health, said the legal notices were the first step in potential lawsuits against the companies.

"We want companies to test for lead before selling these items," Green said. "The federal government isn't doing its job."

The Center for Environmental Health took similar action when it found unsafe levels of lead in vinyl bibs at Wal-Mart and Toys "R" Us stores in California, which resulted in both retailers pulling all vinyl bibs from their shelves nationwide, Green said.

Mattel is facing a number of lawsuits stemming from its recent toy recalls.

Democrats in the U.S. Senate and House this month introduced legislation that would ban lead from toys and other goods used by children younger than six. Lawmakers have criticized the U.S. Consumer Product Safety Commission for not doing enough to protect children from excessive lead. (Reporting by Julie Vorman)

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