Executives from five Chinese steel companies are being investigated as part of a widening probe into the alleged theft of state secrets that led to the arrest of a senior executive at Rio Tinto.

The broadening investigation targets at least seven shippers, traders and managers at some of China's largest steel mills, who are all influential members of the China Iron and Steel Association (CISA), which represents the Chinese industry in annual negotiations with global iron ore miners.

Executives from Anshan Iron & Steel, Baosteel, Laigang and Jigang are said to be under investigation, while a senior official at Shougang Group was last week arrested for alleged commercial crimes.

Stern Hu, Rio's Tinto iron ore executive based in Shanghai, has been held for over a week in a detention centre on the outskirts of the city along with three colleagues.

Mr Hu, an Australian passport holder, has been accused of paying bribes to obtain confidential Chinese state documentation related to iron ore pricing during intense negotiations on 2009 iron ore contracts between Rio and Chinese steel producers.

The situation has increased tensions between CISA and the steel mills, many of which are impatient with the association for failing to reach a new price settlement with miners Rio, BHP Billiton and Brazil's Vale.

"This is a case involving foreign companies, and isn't a small matter. Our association cannot provide more detailed information," General Shan Shanghua, the CISA secretary, told the 21st Century Business Herald. "The situation isn't how many people imagine it."

Officials from the CISA itself are also under investigation, according to local media.

The row is turning into a diplomatic and political nightmare for Kevin Rudd, the Australian Prime Minister, who is under pressure to use his 'special relationship' with Beijing to intervene personally in Mr Hu's case.

The Government has called in the acting Chinese ambassador three times but he has declined to shed any light on the situation.

Yesterday, it was reported that Hu Jintao, the Chinese president, personally endorsed the investigation into Rio Tinto that led to Mr Hu's arrest.

Wayne Swan, the Australian Treasurer, said today that the Government would make appropriate-level representations, at the appropriate time, in support of Mr Hu who has been told he would not receive another consular visit for another month.

"As the Foreign Minister has made clear, we may well be in for the long haul in regard to this case. Australian officials will continue to press Chinese authorities for further detail on the reasons for Mr Hu's detention and reiterate Australia's view that his case should be handled expeditiously," he said.

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