BEIJING (AP) — Two water plants shut for three days after a massive chemical leak in eastern China resumed operation Monday, local officials and state media confirmed.

Authorities have arrested two officials from the Biaoxin Chemical Company — plant manager Ding Yuesheng and Hu Wenbiao, the company's legal representative — and closed the factory in Yancheng city in Jiangsu province, the official Xinhua News Agency said.

An investigation by environmental inspectors showed that the plant had been illegally discharging the chemical compound phenol into the Xinyanggang River, according to a notice on the local government Web site. Phenol compound is used to make products such as air fresheners, medical ointments, cosmetics and sunscreens.

Police are conducting a criminal investigation into the contamination of water supplies for the city's 1.5 million residents. Tap water to at least 200,000 people was cut on Friday, the statement said. But the city managed to restore supplies hours after the cut by increasing capacity at a third plant.

Du Yu, a city government spokesman, said Monday that tests showed the city's water was now drinkable, and that the water supply from the city's west water plant, along with a smaller one, would resume this afternoon.

Yancheng city officials have decided to stop all production by chemical factories operating near drinking water sources and move the factories as soon as possible, Xinhua reported. "Severe measures" will be taken against any other polluters, it said.

In recent years, a series of high-profile industrial accidents along major rivers have disrupted water supplies to big cities, as the nation's booming economy brought more heavily polluting industries.

Last year, heavy pollution turned portions of the Han river, a branch of the Yangtze in central Hubei province, red and foamy, forcing the government to cut water supplies to as many as 200,000 people.

In 2005 carcinogenic chemicals, including benzene, spilled into the Songhua River. The northeastern city of Harbin was forced to sever water supplies to 3.8 million people for five days. The accident also strained relations with Russia, into which the poisoned waters flowed.