(Adds no comment from Veolia)
BEIJING, April 14 (Reuters) - A Chinese government team will probe a local unit of French firm Veolia Environnement suspected of delaying reporting water contamination which affected supplies in a major northwestern city, state radio said on Monday.
Levels of benzene, a cancer-inducing chemical, in Lanzhou's tap water rose 20 times above national safety levels on Friday, forcing the city to turn off supplies in one district and warn other residents not to drink tap water for the next 24 hours.
The water supply company, Lanzhou Veolia Water Co, is majority-owned by the city government, with Veolia China, a unit of Veolia Environnement, holding a 45 percent stake.
The government has already blamed a crude oil leak from a pipeline owned by a unit of China National Petroleum Corp for the presence of benzene.
Veolia said it could not comment and referred to local authorities, which are leading the investigation.
State radio said on its website that Veolia had discovered the benzene spike on Thursday afternoon, but only reported it to the city government the next morning.
Zheng Zhiqiang, deputy head of the government investigation team, was quoted as saying "the investigation team's next job" was to look at whether Veolia's actions were in accordance with regulations.
"We must verify and get evidence from relevant departments and people, including Veolia, about the discovery, reporting and handling situation of the benzene incident," Zheng said, according to state radio.
Lanzhou city authorities said on Friday they found 200 micrograms of benzene per litre of water. The national safety standard is 10 micrograms.
According to Xinhua, investigators found crude oil in soil along a duct between two waterworks owned by Veolia.
Lanzhou, a heavily industrialised city of 3.6 million people in the northwestern province of Gansu, ranks among China's most polluted centres.
China has repeatedly vowed to improve the monitoring and timely release of information about pollution. (Reporting by Ben Blanchard; Additional reporting by Geert De Clercq; Editing by Nick Macfie and Mark Potter)