Chinese authorities have scooped up about 100,000kg (220,000lb) of dead fish they say were poisoned by ammonia from a chemical plant, environmental officials and state media said in a reminder of the pollution plaguing the country.

The Hubei province environmental protection department, which was notified of the discovery in the Fuhe river on Monday, pointed the finger at local company Hubei Shuanghuan Science and Technology Stock Co.

Officials said sampling of its drain outlet showed that ammonia density far exceeded the national standard. The company has refused to comment.

Inadequate controls on industry and lax enforcement of existing standards have worsened China's pollution problem, stemming from three decades of economic growth. High-profile incidents this year involving dead animals in rivers – not only attributed to pollution but also carcasses dumped by farmers – have added to concerns about the safety of drinking water.

The latest incident has affected the nearby village of Huanghualao, where 1,600 residents make a living from fishing, said the village's Communist party secretary, Wang Sanqing.

"The dead fish covered the entire river and looked like snowflakes," he said. He said the village had 150 fishing boats and could lose up to 70,000 yuan (£59,000) a day.

The environmental department warned the public not to eat the dead fish but said drinking water had not been affected. It ordered the company to suspend operations and fix the pollution problem.

The official Xinhua news agency said about 100,000kg of dead fish had been cleared from 25 miles of the river but did not cite a figure for the number of fish. The environmental department confirmed "a great number of fish" had been recovered.