Authorities censor publication after revelations that the premier's relatives have accumulated billions during his leadership

China's foreign ministry has accused the New York Times of smearing the country by reporting that the premier Wen Jiabao's extended family has controlled assets worth at least $2.7bn (£1.67bn).

A spokesman, Hong Lei, said the report "blackens China's name and has ulterior motives". Authorities have also blocked the news organisation's main and Chinese-language websites and banned searches for "New York Times" in English and Chinese on microblogs.

"China manages the internet in accordance with laws and rules," Hong told reporters at a daily briefing when asked why the sites were inaccessible.

The New York Times reported that several of Wen's close relatives had become extremely wealthy since his ascent to leadership. But in many cases their holdings were obscured by layers of partnerships and investment vehicles involving friends, colleagues or business partners, it said, in a detailed and lengthy account based on an extensive review of company and regulatory filings.

A single investment held on paper by Wen's 90-year-old mother Yang Zhiyun – a retired schoolteacher – was worth $120m five years ago, the New York Times said. It added it was unclear if Yang was aware of the holdings in her name.

The report is embarrassing not only for Wen himself – who comes from a modest background and is widely seen as the sympathetic, populist face of the government – but for the party. It is the latest in a string of unwelcome revelations about the vast wealth amassed by those around senior leaders.

Authorities blocked the Bloomberg website earlier this year after it exposed the multimillion-dollar assets held by the extended family of Xi Jinping, heir-apparent to the presidency. The news agency has also reported that relatives of the disgraced politician Bo Xilai accumulated at least $136m in assets.

Many people – particularly among the elite – had been aware of rumours about Wen's relatives, but the full detail of the report and the scale of their assets is striking. The timing is also sensitive, given that the once-a-decade leadership transition is weeks away.

But the blocking of the websites and censorship on Chinese microblogs means that many may remain unaware of the New York Times report.

Several users commented on the article on the Sina Weibo service, but the remarks were quickly deleted. A BBC news report was blacked out in Beijing as it referred to the article.

Wen has repeatedly stressed the need to curb corruption, urging leaders to ensure their families and associates do not abuse government influence, and pushed for officials to disclose the assets of their immediate families.

Such declarations are not made public and the Times said four-fifths of the assets they found were held by relatives such as his mother, younger brother and various in-laws – none of whom would be covered by the party rules.

A former government colleague of Wen's, who spoke anonymously, told the Times: "In the senior leadership, there's no family that doesn't have these problems … His enemies are intentionally trying to smear him by letting this leak out."

A US diplomatic cable obtained by WikiLeaks, dating from 2007, quoted an executive in Shanghai as saying: "Wen is disgusted with his family's activities, but is either unable or unwilling to curtail them."

In March, the prime minister made a point of telling reporters at his annual press conference that he had "never pursued personal gain", adding that while he had faced criticism, "history will have the final say".

Wen's mother's shares, and those of other relatives, were held via an investment vehicle, Taihong, run by Duan Weihong, a wealthy businesswoman close to Wen's wife. Weihong told the Times that the investments were actually her own but she had sought a low profile so asked relatives to find other people to hold the shares on her behalf; they had by "accident" and without her knowledge chosen the prime minister's relatives.

Wen's wife, Zhang Beili, who is rarely seen with her husband, works in the diamond trade. Their son Winston Wen runs New Horizon Capital, now one of China's biggest private equity funds.

His wife Yang Xiaomeng told the Times: "Everything that has been written about him has been wrong.

"He's really not doing that much business any more."

The Times said members of Wen's family had declined to comment or did not respond.

Separately, the Brookings Institution said the brother of the man expected to replace Wen Jiabao – Li Keqiang, already vice-premier – should be moved from his post as a senior official at China's state-owned tobacco monopoly. Li oversees public health as part of his duties.

His younger brother Li Keming is deputy director of the tobacco body and Cheng Li, author of the Brookings report, suggested his role might have set back attempts to curb tobacco use in China.