The clip, filmed last month, appeared to show a young man standing on a table at a Haidilao branch in Shanghai urinating into a vat of boiling broth.

The video sparked an immediate backlash on social media, with users venting anger and disgust at the brazen breach of food safety at one of the country's most popular restaurant chains.

Haidilao confirmed the incident in a social media post on Wednesday, saying it was "extremely sorry" and pursuing legal action.

"In the early hours of February 24, two men urinated into a hotpot after dining in a private room at a Haidilao branch on the Bund in Shanghai," the company said, referring to the eastern megacity's ritzy waterfront promenade.

"As management had never made contingency plans or given training for dealing with this type of incident, staff at our branch were unable to detect any abnormalities at the scene or uphold the safety of the dining environment," it said.

The restaurant said it would offer compensation to any customers involved in the store's over 4,100 orders between February 24 and March 8, equivalent to a full refund plus a lump sum of 10 times that amount.

A Shanghai police statement said two 17-year-olds, respectively surnamed Tang and Wu, had been placed in "administrative detention".

China's age of criminal responsibility is 16 for most crimes, but can be as low as 12 for major offences like murder.

- Lip-smacking broth -

Beloved in China for its fresh morsels of meat, lip-smacking broth and congenial service, Haidilao has expanded overseas in recent years, with locations in the United States, Japan, Britain and elsewhere.

But its mea culpa received short shrift on Weibo, where users accused the firm of dragging its feet for weeks before acknowledging its error.

"Where was this (apology) at the beginning? Wouldn't it have been better to say this right from the start," one comment said.

Others took aim at a previous statement -- now seemingly deleted -- that blamed "malicious information spreaders" for harming the company's reputation.

Food safety scandals were once common in China, where in 2008 tainted milk formula made hundreds of thousands of babies ill and was linked to six deaths.

The country has made significant improvements since then, but misconduct in the catering industry still crops up.

A prominent chain of braised chicken restaurants apologised this week after state media revealed unsanitary practices at some of its franchise stores, including the use of rotting ingredients and the recycling of leftover meals.