LONDON (AFP)--A factory that produces jeans for U.S. clothing retailers Gap In. (GPS) and Levi Strauss & Co. is illegally dumping chemical waste in Lesotho, posing a major hazard to children, the Sunday Times reports.

The weekly paper said it had discovered that the plant, operated by Taiwanese firm Nien Hsing Textile Co. Ltd. (1451.TW), was pouring dark blue effluent into a river used for cooking and bathing.

The paper also alleged that the firm was dumping needles, razors and harmful chemicals at two municipal dumps that attract young children who search for pieces of clothing to sell.

Many of the children worked up to 10 hours a day and complained of ailments that included breathing difficulties, weeping eyes and skin rashes, according to the newspaper.

Both Gap and Levi Strauss have ordered immediate investigations, the paper reports.

Gap said it had put the factory on notice to improve, while Levi Strauss said it was "disturbed" by the findings, said the report.