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By Chris Buckley

BEIJING, Oct 8 (Reuters) - Officials in the north Chinese province at the heart of a toxic milk scandal hid a coal mine explosion that killed more than 30 miners three weeks before the Beijing Olympics, state media reported.

The People's Daily said on Wednesday that 22 officials were being investigated by prosecutors and one has been arrested, accused of covering up the mine explosion in Hebei province on July 14, weeks before Olympic Games opened on Aug. 8.

The blast in the unlicensed Lijiawa mine in Yu County, also known as Wei County, was set off by explosives illegally stored down the mine shaft. Relatives of the dead were kept quiet through payments and threats, the Xinhua news agency said.

"An investigation has shown that after the explosion, the mine owners and county and township governments colluded to conceal the accident," the acting governor of Hebei, Hu Chunhua, told officials, according to Xinhua. "This is a shocking case."

The report did not explain why the deaths took so long to come to light. But some observers of Chinese politics said the cover-up appeared to be another instance of officials seeking to avoid recriminations before the Olympics, when they were under intense pressure to avoid accidents and protests.

"Of course, this is related to the Olympics. The media weren't allowed to report any negative stories, so it was easy for local officials to cover-up," said Li Datong, a former editor of the China Youth Daily sacked for criticising censorship.

"Central officials probably didn't know, but they weren't looking too hard ... Now these things are coming out because the central leaders don't want to be held hostage by local officials' mistakes. It's a warning signal."

PRODUCT WITHDRAWALS

Hebei neighbours the national capital, and officials there were under especially intense pressure to quell threats to "social stability" before and during the Olympics.

Hebei is also home to Sanlu Dairy, maker of the chemical-tainted milk powder that officials have blamed for killing four children and making many thousands sick. Subsequent detection of the chemical melamine in many Chinese dairy products has sparked alarm and product withdrawals in many export markets.

Sanlu and local officials concealed the problem before and during the Beijing Olympics, the central government has said.

After the mine disaster, the corpses were taken away and kept hidden in surrounding areas, where the grieving families were also taken to be paid off, the Xinhua report said.

"Cash was used to keep them quiet as well as threats and other means, and the miners and their families were not allowed to reveal the facts to the outside," said the report.

Those under investigation include the county Communist Party chief, a local police chief and work safety and mining officials from nearby Zhangjiakou city, which oversees the county. The mine owner is also under investigation, Xinhua reported.

Some residents of Nanliuzhuang Town near the mine told Reuters they had heard about the blast at the time, while others said they had not.

"I didn't see police at the time, but there have been many of them in past few days," said one resident, who only gave his surname, Men.

China depends on coal to fuel much of its ballooning energy needs, and the country's shafts are the deadliest of any major mining nation. Safety officials have striven to cut accidents by shutting smaller mines and tightening inspections.

A total of 3,786 coal miners died in gas blasts, flooding and other accidents last year, down 20 percent from 2006. Officials reported another drop in the first 8 months of this year.

But deadly mine accidents are still a regular staple of news reports, and the Lijiawa blast was not the only recent disaster to involve suggestions of official concealment and neglect. (Editing by Jerry Norton and Alex Richardson)

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