BEIJING (AP) -- A company alleged to have used child labour to produce licensed products for the 2008 Beijing Olympics has had its contract terminated, Beijing organizers said Tuesday.

In addition, three other companies accused of labor-law violations in a report released in early June have had their contracts suspended.

BOCOG, the acronym for the Beijing organizing committee, said it investigated the cases reported by PlayFair 2008, an alliance of global trade unions and labor groups. PlayFair 2008 reported labor-law violations in four southern China factories producing Olympic-licensed souvenirs.

"BOCOG will, in line with its licensing agreement, seriously deal with any licensees who have violated national labor laws and regulations," Beijing organizers said in a statement.

Organizers identified the company as Lekit Stationery Company, Ltd., which is based in Dongguan.

Organizers said its investigation showed Lekit "was believed to have used child labor by employing eight students for packaging work," a statement said. It said the work was not related to Olympic products.

"In addition, labor contracts were not signed with some of its workers," the statement said.

"BOCOG has decided to terminate Lekit Stationery Co.'s right to manufacture and sell Olympic licensed products and revoked its licensing contract with the company."

Organizers said the other companies were being suspended because of "overtime issues." It said no child labor cases were involved. The three are: Yue Wing Cheong Light Products Co. Ltd. and Mainland Headwear Holdings Ltd., both of Shenzhen, and Eagle Leather Products Ltd. of Dongguan.

The allegations proved embarrassing to local organizers -- and the International Olympic Committee. Beijing organizers want the Olympics to project a new, modern image of China, which has been troubled lately by products safety issues.

The Switzerland-based IOC fiercely guards its image, but it argues it does not have direct control over all official products that carry the five-ring Olympic label. It said it has policies on fair labor standards that it expects Olympic host cities and licensed manufacturers to follow.

The PlayFair report -- along with the actual charges -- also drew attention to the vast wealth gap in China. Beijing is spending at least US$40 billion (euro30 billion) to modernize the city for the Olympics, a stark contrast to the legal minimum wage in southern China of US$90 (euro65) a month.

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