BEIJING, Oct 10 (Reuters) - China has stepped up scrutiny of milk production, tightening dairy controls and threatened to "out" offenders amid a widening health scandal, state media said on Friday.

At least four Chinese infants have died and thousands have been treated in hospital after drinking toxic milk and milk formula that has led to Chinese-made products being pulled off shelves around the world.

The formula was laced with the chemical melamine to cheat nutrition tests, the latest in a long line of Chinese food and product safety scandals involving items as diverse as fish, drugs, toys, toothpaste, tyres and petfood.

"The regulations tighten control of how milk-yielding animals are bred, how raw milk is purchased and the production and sales of dairy food," Xinhua news agency said.

"There will also be more severe punishment for people who violate safety standards and quality control departments that fail to fulfil duties ... Law-breaking producers will be blacklisted and outed publicly."

Several local officials have already been sacked and 27 people have been arrested. More than 20 milk companies have already been named as offenders.

"Any non-food chemicals or hazardous substances are prohibited from being added into raw milk in its production, purchase, storage, transport and sale," Xinhua said, citing the regulations issued on Thursday by the State Council.

But the Health Ministry on Wednesday released new dairy standards and safety limits for melamine -- one milligram of melamine per kilogram for infant formula and 2.5 mg per kg for milk, milk powder and food products containing at least 15 percent milk.

The U.S. Food and Drug Administration said earlier this month that no amount of melamine was safe in baby formula. (Reporting by Beijing newsroom; Writing by Nick Macfie; Editing by Alex Richardson)

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